Wall Street closes lower on US inflation data

Wall Street’s main indexes fell on Thursday, after February consumer prices rose as expected, reinforcing the idea that the Federal Reserve (fed) will raise interest rates this month.

The S&P 500 it lost 18.36 points, or 0.43%, to 4,259.52 points. Meanwhile, the Nasdaq Composite lost 125359 points, or 0.95%, to 13,129.96 points; and the Dow Jones Industrial Average it fell 112.18 points, or 0.34%, to 33,174.07 units.

The report of work Department showed consumer prices soared 7.9% year-on-year, the biggest annual rebound in 40 years.

Although the figures coincide with economists’ expectations, investors fear that the inflation accelerate further in the coming months, as Russia’s war against Ukraine drives up the costs of oil and other raw materials.

“The bottom line is that inflation is high and there’s more to come,” said Peter Cardillo, chief market economist at Spartan Capital Securities. “I was expecting inflation to peak in the second quarter, but now that depends on oil. We may not see any relief until the end of the year.”

The uncertainty surrounding the Russian invasion of Ukraine also helped convince market participants to resume their flight to safety. All three major indices ended negative, albeit far from session lows.

The chairman of the Fed, Jerome Powellsaid last week that he would support a quarter-point rate hike when the US central bank meets next week and would be “prepared to move more aggressively” later if inflation doesn’t ease as fast as expected.

Traders now see a 95% chance that the Fed will raise rates by 25 basis points at its March meeting.

Meanwhile, talks between Russia and Ukraine failed to produce any breakthrough as the war entered its third week on Thursday.


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