ASX set to fall as Wall Street slumps on inflation report; Nvidia dives again; Anthropic targets $2 trillion valuation

Résumé détaillé

US stocks are falling after a report showed inflation was worse across the country last month than economists expected.

US stocks are falling after a report showed inflation was worse across the country last month than economists expected.

The S&P 500 fell 0.8 per cent and gave back some of its big rally from the day before. The Dow Jones Industrial Average was down 291 points, or 0.6 per cent, in early afternoon trade, and the Nasdaq composite was 1.3 per cent lower.

The Australian sharemarket is set to decline, with futures at 4.56am AEDT pointing to a fall of 61 points or 0.7 per cent, at the open. The ASX jumped 1.1 per cent on Tuesday. The Australian dollar was weaker at US68.54¢.

Pressure from the bond market undercut stocks following the discouraging report on inflation. People had to pay prices for groceries, electricity and other costs of living that were even higher last month than economists expected. That could push the Federal Reserve to hike its main interest rate at its next meeting in December and beyond.

Higher interest rates can help rein in inflation, but they do so by making it more expensive for everyone to borrow money and by slowing the overall economy. Higher rates also make investors less willing to pay high prices for stocks and other investments.

One Fed official even hinted the central bank may increase the federal funds rate by double the typical amount next month because of how high inflation has remained for years.

Speaking in London before the inflation report was released, Fed Governor Christopher Waller said “a stronger policy move may be needed” if the report showed an important underlying measure of inflation rose by 0.3 per cent from September.

In that case, he said the Fed should consider hiking the federal funds rate by half a percentage point rather than the typical quarter point. Moving by only the usual amount could “put our credibility at risk, a risk I am not eager to take.”

Shortly afterward, Tuesday’s inflation report showed that the underlying measure of inflation Waller was worried about was exactly 0.3 per cent, the threshold he had set.

Début de l'article, extrait de The Age. Pour lire la suite, ouvrez l'article chez le média.