U.S. Stocks Take a Hit as Inflation Data Exceeds Predictions, Retail Sectors Witness Rise
Summary:
On October 12, 2023, U.S. stocks declined due to higher-than-predicted inflation data. The Dow Jones, S&P 500, and Nasdaq all experienced losses, while some retail-sector companies, like Walgreens and Dollar General, saw share increases. The release of the Consumer Price Index data caused a rise in US Treasury yields and a decrease in gold value. In currency matters, the US Dollar Index ascended, while the Euro and the Yen both fell. Oil experienced a slight increase.
On October 12, 2023, U.S. stock values dropped in response to freshly published data revealing inflation levels had surpassed predictions. The Dow Jones Industrial Average suffered a decrease of 173.73 points (about 0.51%), dropping to 33,631.14. The S&P 500 slipped by 27.34 points (approximately 0.62%), concluding its day at 4,349.61. The Nasdaq index, populated heavily with tech stocks, saw a loss of 85.46 points (roughly 0.63%), to finish the day at 13,574.22.
At 8:30 in the morning, Eastern Time, the U.S. Bureau of Labor Statistics unveiled the Consumer Price Index data for the month of September. The data showed a price increase of 0.4% within the span of the month and a 3.7% annual rise up until the first of October. This was above the 0.3% monthly and 3.6% annual estimates by Dow Jones. The higher-than-predicted figure was perceived by traders as a negative indicator for stock values, as it suggested that the Federal Reserve might have to maintain high interest rates for an extended duration while trying to manage inflation.
However, not all shares were negatively affected. Some retail-sector company shares experienced an exceptional surge. Walgreens saw a 7% increase following its announcement of smaller-than-expected losses. Dollar General shares sky-rocketed by almost 10% in post-market trading upon the company's announcement that its former CEO, Todd Vasos, will make a return.
New inflation data also impacted US Treasury yields, causing them to rise. The 10-year tradable government bond increased by 0.102 points, rising to 4.699%. The two-year note gained 0.066 points, advancing to 5.071%. Gold declined by $6.52 per troy ounce, dropping to $1,868.93. This drop continues its downward trend that began on May 4, when gold reached a peak of $2,060.60. Since that high, worries about increasing interest rates and a robust dollar have kept gold prices decreasing.
Meanwhile, a modest improvement was seen in oil, with West Texas Intermediate increasing by one cent per barrel (0.012% boost) to hit $83.50. Brent Crude grew by $0.56 (0.65%) per barrel, hitting $86.38.
In terms of foreign exchange markets, the US Dollar Index went up by 0.76 points, to come in at 106.58. The euro saw a drop of 0.85%, coming to rest at $1.0528. The yen dropped by 0.47%, resulting in a rise to 149.7720 in the amount of yen needed for a dollar purchase. It is widely held among traders that if this number surpasses 150, the Japanese monetary authorities might step in.
The information for this reporting came from sources like Apmex, CNBC, MSN money, Yahoo Finance, and Business Insider.
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Published At
10/12/2023 9:40:30 PM
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