Dow plummets 500 points as sell-off intensifies amid U.S. inflation concerns
Stocks sold off and the Dow dropped 500 points Friday as U.S. inflation and geopolitical worries once again weighed on investor sentiment.
CNBC:
The Dow Jones Industrial Average slid 465 points, or 1.2%. The S&P 500 1.4%, while the Nasdaq Composite pulled back by 1.6%.
JPMorgan Chase shares declined more than 5% after the banking giant posted its first-quarter results. The bank said net interest income, a key measure of what it makes through lending activities, could be a little short of what Wall Street analysts are expecting in 2024. CEO Jamie Dimon also warned about persistent inflationary pressures weighing on the economy.
Oil prices continued their rise on reports that Israel is preparing for a direct attack by Iran this weekend, in what would be the biggest escalation of tensions in the region since the outbreak of the Israel-Hamas war last October. U.S. crude was last at $87.11 a barrel.
That, coupled with fresh U.S. imports data, added fuel to inflation concerns that have put pressure on the market.
Consumers are also growing worried about the persistent inflationary pressures. The consumer sentiment index for April came in at 77.9, below the Dow Jones consensus estimate of 77.9, according to the University of Michigan’s Surveys of Consumers. Year-ahead and long-run inflation expectations also ticked up, reflecting frustrations over sticky inflation.
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MacDailyNews Take: Again, the Fed stopped raising rates too soon.
As we wrote in February 2023, “When certain quarters, including the Fed, delude themselves and others that ‘inflation is transitory’ and waste at least a year before doing a mere portion of what is necessary* (interest rate hikes), the price will be paid for being delusional and late.”
‘Tis best to get a handle on inflation, if you know how, while you still can. – MacDailyNews, May 11, 2021
Stop the misguided crusade against domestic energy production and profligate federal spending and inflation will be stopped dead in its tracks. It’s not difficult. – MacDailyNews, May 11, 2022
For new generations, sometimes tough lessons have to be retaught and learned the hard way. As we go through this, remember: It’s always darkest before the dawn. – MacDailyNews, July 14, 2022
Inflation is repudiation. — Calvin Coolidge
When a business or an individual spends more than it makes, it goes bankrupt. When government does it, it sends you the bill… [which] comes in two ways: higher taxes and inflation. Make no mistake about it, inflation is a tax and not by accident. — Ronald Reagan
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