If yesterday it started immediately after the publication of the CPI index, today Wall Street is slowing down due to the other parameter that measures the trend of inflationary pressures, ie due to the PPI index.
The data, released before the start of the trading day, raised questions about the real turnaround in US inflation.
Among other things, after the sprint start on the eve, which had led the Dow Jones to jump immediately by more than 400 points, the euphoria on Wall Street had subsided significantly, so much so that, in the finale, the indexes had zeroed much of the earnings.
Today, the release of the Producer Price Index (PPI) has put investors further on the alert.
PPI index not convincing: fear of inflation returns
The data revealed that, in the month of July, the US producer price index (PPI) rose on an annual basis by 0.8%, well above the increase of +0.2% in July (revised from the +0.1% initially disclosed) and over the +0.7% estimated by analysts.
Excluding the more volatile components represented by the prices of energy and food, the PPI index rose by 2.4% on an annual basis, compared to the +2.3% expected, and at the same pace as in June, confirming the solidity of the US inflation.
Furthermore, on a monthly basis, the figure strengthened by 0.3%, more than the +0.2% estimated by the consensus.
The core component also rose, on a monthly basis, by 0.3%, again more than the +0.2% expected.
Yesterday, at the beginning of the session and after the release of the CPI index, Wall Street had marked a strong rally, looking favorably on the trend of the data, which had initially fueled hopes of a halt in rate hikes by the Fed of Jerome Powell.
In fact, the CPI rose in July by 0.2% on a monthly basis and by 3.2% on an annual basis, below the 3.3% expected by the consensus of analysts.
However, with the core component growing at an annual rate of 4.7%, several analysts had already warned yesterday that rates would remain higher for a longer period of time (higher for longer), as the inflation target of the Fed, equal to 2%, is still a long way off.
Enthusiasm has therefore definitely subsided, in a week that is about to end with a minus sign, for the second consecutive time for the S&P 500 and the Nasdaq.
The two share lists are down on a weekly basis by 0.5% and 1.7% respectively.
The Dow Jones, on the other hand, is preparing to end the week with a slight gain.
At 16.10 Italian time, the Dow Jones is flat with a change of +0.07%. The S&P 500 fell 0.28%, while the Nasdaq Composite fell 0.64%.