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Rose 1.4% Friday for a weekly gain of 2.8%. London’s FTSE 100 Index fell 2.1% Friday and slid 2.9% for the week. In European equities, the Stoxx Europe 600 Index closed 2.7% lower Friday, bringing its weekly loss to 3.9%. That’s the highest settlement for the most-active gold contract since May 5. oil benchmark gained 1.5% for the week.Ĭlimbed 1.2% to settle at $1,875.50 an ounce. Gained against a basket of rival currencies, rising 0.9%.Įnded lower, with West Texas Intermediate crude for July deliveryįalling 0.7% to settle at $120.67 a barrel. Eastern Time levels, according to Dow Jones Market Data. Jumped 11.5 basis points to 3.156%, the highest since Nov. Shares slumped 24.5% after the electronic-documents company missed on fiscal first-quarter earnings and trimmed its billings guidance. “The Fed’s latest mistake is that they did not act strongly to cool inflation, and they will now be forced to deliver more rate hikes as inflation is clearly not transitory and not ready to peak.” Which companies were in focus?ĭropped 5.2%, with all three being among a host of internet stocks that Goldman Sachs reportedly cut to sell. “This was a very bad inflation report for both the White House and Fed,” wrote Edward Moya, senior market analyst for the Americas at OANDA, in an emailed note. inflation data comes ahead of the Fed’s policy meeting next week. economist at Oxford Economics, in a note. We expect household sentiment will remain historically depressed in the near term as inflation risks remain tilted to the upside and pocketbooks continue to feel the squeeze from widespread price pressures throughout the economy,” said Kathy Bostjancic, chief U.S. “The surge in gasoline prices to record levels will likely continue to filter into household inflation expectations if elevated prices persist well into the summer. Consumer expectations for inflation over the next 5 years jumped to 3.3% from 3% in the prior month.Īlso see: ‘Catastrophically bad’ inflation report is boosting chances of a 75 basis point hike in June or July Meanwhile, Americans’ expectations for overall inflation over the next year rose in June to 5.4% from 3.3% in May. Economists polled by The Wall Street Journal had expected a June reading of 59. The University of Michigan’s gauge of consumer sentiment fell sharply to a record low reading of 50.2, down from a May reading of 58.4. Read: Fed is the market’s biggest risk as stocks and bonds stumble together, says Citi Taking the hardest hit with a drop of 4.2%, according to FactSet data.
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All 11 of the S&P 500’s sectors ended down Friday, with consumer discretionary The Fed may have to tighten policy “more aggressively than markets were hoping for,” as the latest CPI reading disrupted the idea of peak inflation, according to John Hancock’s Roland. households live in a headline CPI world,” said Rick Rieder, head of the BlackRock’s global allocation investment team, in emailed comments Friday.
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“Federal Reserve policy makers like to focus on their ‘preferred’ inflation measure, core PCE, which may decline in the next several months, but in a very real sense, most U.S. See: Biden blasts ‘rip-off’ by shipping companies, attacks Exxon as inflation hits a fresh 40-year high While the Fed views the core rate as a more accurate measure of price trends, surging food and gasoline costs are fueling a public and political outcry over inflation. But the increase in the core rate over the past year slowed to 6% from 6.2%. The consumer-price index showed the so-called core rate of inflation, which omits food and energy, rose 0.6% in May, a tick higher than expected. economy, said Roland, explaining that it’s now more likely that the Fed will be tightening into a recession as it tries to bring down the cost of living. “We are revising our forecast to increase the probability here that we do see a hard landing” for the U.S. The soaring 8.6% rate of inflation seen in the 12 months through May is the highest since 1981. “The hotter-than-expected CPI reading is challenging the peak inflation story,” said Emily Roland, co-chief investment strategist at John Hancock Investment Management, in a phone interview Friday. See: Consumer prices surge again, CPI shows, and push U.S. The year-over-year rate rose 8.6%, topping the 40-year high of 8.5% seen in March.
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inflation increased 1% in May, well above the 0.7% monthly rise forecast by economists surveyed by The Wall Street Journal. The stock market dropped as investors worried that surging inflation’s bigger than anticipated jump in May will prompt the Federal Reserve to become more aggressive tightening its monetary policy, potentially triggering a recession.