Wall St. retreats as sky-flying US CPI fuels up inflation fears

• Financial

On Wednesday, all three key indices of Wall St. had rounded off the day in red inks, winding up the session in a negative territory for a second successive day, as a blistering rise in US Consumer Prices Index (CPI) that had hit a 31-year peak in October, ramped up bets that a latest leg of spike in inflation indicators could persist deeper into the 2022 which might eventually prompt the US Fed to sway away from its dovish monetary stance.

Aside from that, a restoration of safe-haven bid of the American currency coupled with a havoc-scale sell-off wave of riskier assets late in the day following remarks from US President Joe Biden that the White House was looking to an option to put the kibosh on a skyscraping US inflation, added to further strain on Wall Street.

In point of fact, earlier in the day, US Labor Department data had unfurled that the US CPI rose 6.2 per cent over the past twelve months through October, marking off the strongest annual rate in 31 years, while the key inflation indicator soared 0.9 per cent last month compared to the same time a year earlier following a September CPI advance of 0.4 per cent.

Wall Street falls apart as inflation data prompts broad-based inflation worries

Citing statistics, in the day’s Wall St. closing bell, trade-sensitive Dow dwindled 0.66 per cent to 36,079.94 and benchmark S&P 500 shed 0.82 per cent to 4,646.71, while tech-heavy Nasdaq was nudged as much as 1.66 per cent lower to 15,622.70.

Meanwhile, addressing to a growing cynicism on US Fed’s policy view that a recent run of strong inflation would likely to be transitory, a partner at Cherry Lane Investments in New Venom, New Jersey, Rick Meckler said, “Even though the Federal Reserve believes that inflation is transitory, the evidence is starting to add up that that's not true.

The Fed has made very few moves outside of what they've told the markets they plan to do, but I think even they've got to be a little concerned by the strength of the increase”.