Strong declines on the US stock market. Concerns about inflation and the effects of the war with Iran are growing
The main indices on the US stock exchange ended the session with strong declines. Dow Jones Industrial Average fell to its lowest level this year after a report released Wednesday showed U.S. inflation was already at precarious levels before the U.S. attack on Iran.
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Index Dow Jones Industrial Average dropped by 1.63 percent on Wednesday. With a monthly decline of over 5%. the index is heading for its worst month since 2022. S&P 500 fell by 1.36 percent, a Nasdaq Composite — by 1.46 percent
Stocks in the US fell on Wednesday after the publication of new economic data and comments from the chairman of the Federal Reserve, which fueled concerns about persistent inflation in the country.
The Fed kept interest rates unchanged on Wednesday in the range of 3.5 percent to 3.75 percent, stating in a statement after the meeting that “the implications of events in the Middle East for the U.S. economy are uncertain.”
“The forecast is that we will make progress on inflation; not as much as we expected, but some progress,” Fed Chairman Jerome Powell said at a news conference.
However, the central bank signaled that it still expects one cut this year.
Data from the US fueled fears about inflation
The producer price index – which tracks changes in wholesale prices – rose 0.7% in February, well above 0.3%, according to data released Wednesday. estimated by economists.
The report shows that inflation was already at precarious levels before the outbreak of the war with Iran, which heightened fears of stagflation amid rising oil prices.
Wall Street is preparing for a sharp price increase
“The higher-than-expected result is all about tariffs,” Todd Schoenberger of CrossCheck Management told CNBC, noting that prices for metals, industrial materials and production costs are rising. “This is structural, not temporary, inflation, which will probably have an impact on monetary policy in the third quarter,” he said.
“Add to this the rising energy prices that we have seen since the beginning of the war with Iran, which have not yet been reflected in these reports, and Wall Street is preparing for a sharp increase in prices, which will clearly affect consumption levels“- he added.
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