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Following news that Americans borrowed more than ever in the last quarter on their credit cards, US markets finished down on Wednesday.
Additionally, the Federal Reserve’s interest rate choices may also be influenced by US Consumer Price Index (CPI) inflation statistics, which will be released the following day.
The markets right now are just sort of floundering. The July CPI report will be revealed tomorrow, which is the reason for that.
On Tuesday, the New York Federal Reserve Bank reported that US credit card debt had reached $1 trillion, and Philadelphia Federal Reserve President Patrick Harker suggested that the US central bank might be nearing the point where it can maintain interest rates.
The consumer is the backbone of the economy, particularly with the rising price of oil. They will feed us more into the story of a recession if they become overstretched and cease spending.
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Tech Giants Dip as Rate-Sensitive Stocks React
CME FedWatch Tool estimates that 86.5% of traders expect no rate increase at the Fed’s upcoming policy meeting in September.
Megacap growth and technology firms that are rate-sensitive and have been driving the Wall Street surge, such as Nvidia (NVDA.O), Apple (AAPL.O), and Tesla (TSLA.O), were down between 0.8% and 4.8%.
It is anticipated that the July CPI, which is due on Thursday, would show a small increase from the prior year. Similar to June, a 0.2% increase in consumer prices is witnessed month to month.
In July, deflation erupted in China’s consumer sector. The National Bureau of Statistics said that the consumer price index (CPI) fell in the second-largest economy in the world, marking the first decrease since February 2021.
The Nasdaq Composite (.IXIC) sank 165.93 points, or 1.2%, to 13,718.40, while the S&P 500 (.SPX) lost 31.67 points, or 0.70%, to 4,467.71. The Dow Jones Industrial Average (.DJI) dropped 191.13 points, or 0.54%, to 35,123.36.
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Source: www.reuters.com
