Explained - Three factors why Dow Jones, Nasdaq fell on Tuesday

Résumé détaillé

The Dow Jones ended 160 points lower on Tuesday. At the day's low, the index was down 350 points. The S&P 500, Nasdaq Composite, also overturned some of their losses of the day to end with losses of 0.4% and 0.7% respectively on Tuesday.

Benchmark indices saw some profit booking on Tuesday, November 11, after Monday's sharp upmove as three important factors soured sentiments on Wall Street. The indices, however, recovered from the lows of the day.

The Dow Jones ended 160 points lower on Tuesday. At the day's low, the index was down 350 points. The S&P 500, Nasdaq Composite, also overturned some of their losses of the day to end with losses of 0.4% and 0.7% respectively on Tuesday.

Three important factors contributed to the swinging sentiments on Wall Street on Tuesday. Here's a look:

October's Consumer Price Inflation (CPI) data came in higher than what street economists were anticipating, as a rise in shelter costs, coupled with fuel and gasoline, added to the rise in figures.

October CPI increased by 0.4% on a month-on-month (MoM) basis, compared to the estimate of 0.3%. Adjusted for fuel and food costs, the core CPI figure also increased by 0.3% from last month, higher than the 0.2% estimate.

The year-on-year figures were not delivered this month by the Bureau of Labor Statistics (BLS) as data was not collected for the same months last year due to the government shutdown.

Multiple Federal Reserve officials spoke about how rate hikes would still be needed to bring inflation down.

Speaking at an event in London just before the release of the inflation data, Fed Governor Christopher Waller said more rate hikes would be needed to bring inflation down, which is still "too high."

During his speech, Waller also kept the door open for a 50 basis points rate hike, if inflation pressures persist, to "protect the central bank's credibility."

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