Wall Street closes lower as investors wait for inflation data
inflation data that could influence Federal Reserve interest rate decisions. «The markets today are just kind of waffling around. And the reason for that is tomorrow is going to be the CPI report for July being released», said Jason Krupa, vice president of asset management at Lenox Advisors.
On Tuesday, the New York Federal Reserve Bank said U.S. credit cards debt surpassed $1 trillion, and Philadelphia Fed President Patrick Harker said the U.S. central bank may be at the stage where it can leave interest rates unchanged.
«With price of oil going up, the consumer is the backbone of the economy. If they are too stretched and they stopped spending, that feeds us more into a recession narrative», said Gina Bolvin, president of Bolvin Wealth Management Group in Boston. On Monday, Fed Governor Michelle Bowman said further rate increases were likely, citing nagging inflation and strong economic growth.
Traders put the chance of no rate hike at the Fed's next policy meeting in September at 86.5%, according to CME FedWatch Tool. Rate-sensitive megacap growth and technology stocks that have led the Wall Street rally, such as Nvidia, Apple and Tesla, were down between 1.7% and 5.0%. The Consumer Price Index (CPI) for July, due on Thursday, is expected to show a slight acceleration from last year.
On a month-to-month basis, consumer prices are seen increasing 0.2%, the same as in June. On Tuesday, Wall Street's main indexes ended lower in a broad selloff after credit rating agency Moody's downgraded several small and mid-sized banks. On Wednesday, big banks extended those losses with Bank of America down 0.8% and Wells Fargo down 1.3%.
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