SPX

GLOBAL MARKETS-Equities fall as U.S. inflation data raises more questions

Credit: REUTERS/ANDREW KELLY

Global markets edged lower and the dollar fell on Tuesday after data showed U.S. inflation rose by less than expected, raising renewed questions on when the U.S. central bank will begin tapering its asset purchases.

By Elizabeth Dilts Marshall

"Today's CPI data came in a bit weaker than expected, but (the Producer Price Index) is at a record high and inflation continues to be a key challenge for investors,” said David Petrosinelli, Senior Trader at InspereX.

The U.S. Federal Reserve will meet next week. The August CPI data lifts some of the pressure the Fed faced to announce it would begin tapering its massive bond-buying program.

Further delaying this key Fed announcement is "distorting" the economy and throwing off markets, said BlackRock's Chief Investment Officer of Global Fixed Income Rick Rieder.

"Continuing to stimulate demand higher increases the risk of a severe supply/demand mismatch across economic as well as financial assets," said Rieder, also the head of BlackRock’s global allocation team.

The Dow Jones Industrial Average .DJI fell 262.72 points, or 0.75%, the S&P 500 .SPX lost 20.69 points, or 0.46%, and the Nasdaq Composite .IXIC dropped 33.25 points, or 0.22%.

The prospect of a corporate tax rise in the United States from 21% to 26.5% as part of a $3.5 trillion budget bill is also front and center for investors.

Oil prices rose, extending gains as Nicholas weakened into a tropical storm and the International Energy Agency said demand would rebound in the remainder of the year.

World FX rates YTDhttp://tmsnrt.rs/2egbfVh

Global asset performancehttp://tmsnrt.rs/2yaDPgn

US inflationhttps://tmsnrt.rs/3tDKbm4

Asian stock marketshttps://tmsnrt.rs/2zpUAr4

(Reporting by Elizabeth Dilts Marshall in New York; Tom Arnold in London and Scott Murdoch in Hong Kong; editing by Angus MacSwan and Nick Zieminski)

((Elizabeth.dilts@thomsonreuters.com))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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