Markets end down due to the evolution of US prices

Stock markets ended the session on Wednesday lower, as investors’ appetite for risk was held back by the current scenario of price rises, fueling fears that inflation will be long-lasting. .

The main index of the Mexican Stock Exchange (BMV), the S&P / BMV IPC closed at 51,704.40 points, which meant a drop of 0.79%, while the Institutional Stock Exchange (BIVA), the second stock market center in Mexico obtained a decrease of 0.83%, standing at 1,066.24 integers.

Regarding the main Wall Street indices, the one that presented the greatest fall was the technological Nasdaq Composite of 1.66%, standing at 15,622.71 units. For its part, the S&P 500 closed at 4,646.71 integers, which represented an adjustment of 0.82% and the Dow Jones industrial average stood at a level of 36,079.94 points, which lost 0.66 percent.

Of the 11 main sectors of the S&P 500, the three that registered the greatest falls were energy (-2.97%), followed by technology (-1.68) and communications and services (-1.25 percent).

Some others that also presented losses were: materials (-0.71%), consumer discretionary (-0.68%) and industrial (-0.63 percent).

On the other hand, those that registered increases were public services (0.70%), basic consumption (0.28%) and health (0.26%).

The Consumer Price Index (CPI) of the Labor Department jumped 0.9%, more than expected, and the highest annual increase in 31 years, placing inflation at a level of 6.2 percent.

The report hinted that lingering problems in the global supply chain could make the current wave of inflation take longer to subside than many expected, including the US Federal Reserve.

The surprising inflation data led the market to reconsider its expectations of the Fed’s monetary policy, which triggered sharp falls in the capital market and rises in US bond yields.

Faced with signs of a change in monetary policy, investors tend to turn to instruments that can provide more attractive returns, such as the dollar and Treasury bonds. In this context, the yield on the 10-year US bond rose 12.5 basis points to 1.56%, its biggest increase since February 25.

“The inflation surprise confirms that the increase in prices is spreading beyond the categories related to the reopening, with a general increase in the prices of goods and services under an environment of strong demand and problems in the production chains” said analysts at Intercam Banco.

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