wall street fell on Tuesday, reversing earlier gains, as the Federal Reserve’s impending monetary tightening (fed) once again led growth stocks to losses.
All three major US stock indices turned from green to red in the early afternoon, with market-leading, interest rate-sensitive growth stocks falling from the head of the pack to the rear.
The S&P 500 lost 15.08 points, or 0.34%, to 4,397.45 units, while the nasdaq it lost 40.39 points, or 0.30%, to 13,371.57. The Dow Jones Industrial Average it fell 88.19 points, or 0.26%, to 34,220.36 units.
The turn followed statements by the governor of the Federal ReserveLael Brainard, who reiterated the need for the central bank to deal “quickly” with the highest inflation in decades.
“Comments from Fed officials have been more aggressive than markets expected,” said Paul Nolte, portfolio manager at Kingsview Asset Management.
“(Brainard) has been generally nondescript, but now she’s more forceful in her comments, and that’s making people sit up and take notice.”
The report of the Consumer Price Index of the work Department It showed that the prices that urban American consumers pay for a basket of products registered the biggest monthly jump since September 2005, and an annual increase of 8.5%, the highest year-on-year inflation figure in more than four decades.
Much of the growth in the Consumer Price Index was due to an 18.3% monthly increase in gasoline prices, which hit a record high of $4.33 per gallon.
The report did not move the needle on expectations about imminent interest rate hikes by the fed.
“It’s a reiteration that the Federal Reserve cannot sit idly by,” Nolte added. “They have to get going, as soon as possible.”