NY Stock Market Falls Again Amid Concerns Over Economic Slowdown and Rising Inflation

[Asia Economy New York=Correspondent Baek Jong-min] Major indices on the New York Stock Exchange closed lower ahead of the September Consumer Price Index (CPI) announcement scheduled for the next day and the Q3 earnings season.

[Image source=Yonhap News]

On the 12th (local time), the Dow Jones Industrial Average fell 117.72 points (0.34%) to close at 34,378.34, the S&P 500 dropped 10.54 points (0.24%) to 4,350.65, and the Nasdaq fell 20.28 points (0.14%) to 14,465.92. The major indices maintained a flat trend during the day but turned bearish ahead of the close.

Investors are focusing on the CPI, which will provide hints about the Federal Reserve's (Fed) monetary policy normalization, and the release of the September FOMC minutes.

If inflation continues to rise, not only tapering but also an early rate hike could be possible. The market expects the September CPI to have increased by 5.3%.

Although the CPI rise is expected to have eased, Raphael Bostic, President of the Atlanta Fed, said on the day, "The surge in inflation will not change the Fed's outlook on rate hikes."

In a report released the same day, the IMF stated that inflation risks persist and urged central banks around the world to be prepared to act swiftly even if it means accepting slower economic growth.

On the day, the U.S. 10-year Treasury yield fell to the 1.5% range. Treasury yields had recently been soaring in the 1.6% range, reflecting inflation concerns, but declined due to forecasts of slowing U.S. growth. A decline in Treasury yields means a rise in bond prices.

The IMF lowered its U.S. growth forecast for this year by 1.0 percentage point from 7% to 6%. It also revised China's growth forecast down by 0.1 percentage point to 8.0%. The global economic growth forecast for this year was slightly lowered from 6.0% to 5.9%.

Warnings about the U.S. economic slowdown also came from the labor market. According to the U.S. Department of Labor, job postings in August were 10.43 million, below the expected 10.9 million. Job postings had been setting record highs since March, the highest since statistics began in December 2000, but turned downward in August.

Casino operator MGM's stock soared 9.6% after Credit Suisse doubled its target price. Other casino stocks such as Caesars and Las Vegas Sands also showed gains in the 2% range.

GM closed up 1.5% following the announcement that it reached an agreement with LG and Bolt on the cost burden for electric vehicle battery replacements. GM announced that LG will bear up to $1.9 billion in battery replacement costs.

This content was produced with the assistance of AI translation services.