Stock markets in New York fell sharply on Tuesday after the recent strong price recovery. A disappointing inflation figure weighed down the mood among investors on Wall Street. Consumer prices in the United States rose 8.3 percent in August.
However, economists had expected a sharper cooling in inflation to 8.1 percent, from 8.5 percent in July.
The lower inflation is mainly caused by a drop in gasoline prices, meaning Americans spend less money at the pump. Excluding the strongly fluctuating energy prices, inflation stood at 6.3 percent, compared to 5.9 percent in July. This so-called core inflation, which the US central bank closely monitors, also turned out higher than economists had anticipated.
The Federal Reserve has already raised interest rates significantly several times to tackle inflation and is expected to do so again next week. However, investors had hoped that the Fed would raise interest rates less aggressively amid better inflation.
Shortly after opening, the Dow Jones index was 1.9 percent lower at 31,754 points. The broad S&P 500 fell 2.3 percent to 4015 points, and the technology exchange Nasdaq lost more than 3 percent to 11,887 points.
Oracle rose 0.8 percent. The enterprise software manufacturer saw revenue rise 18 percent in the past quarter, partly due to strong growth in cloud activities. However, profits were somewhat dampened by the strong dollar.
Twitter went down nearly 1 percent. Shareholders of the social media company will vote on Tuesday at a shareholders’ meeting on the takeover bid of Tesla CEO Elon Musk. Twitter and Musk reached an agreement on the $44 billion acquisition in April, but Musk wants to get out of the deal over a dispute over the number of fake accounts on the messaging service. Twitter wants to force the billionaire through the courts to take over the company after all.
