Wall Street stocks opened sharply lower Wednesday after fresh consumer price data exacerbated recession fears, as the Federal Reserve aggressively hikes interest rates.
All three major indices were down more than one percent early Wednesday following the report, which showed US inflation surging to a record peak of 9.1 percent in June over the last 12 months in a report that was worse than expected.
Driven by record-high gasoline prices, the consumer price index jumped 1.3 percent in June. Gasoline prices have retreated in recent weeks, however, a shift that some analysts predict will lead to moderating inflation in subsequent reports.
Cresset Capital’s Jack Ablin called the report a “setback” that boosts the likelihood the Fed will again institute a three-quarter-point interest rate increase later this month.
“It’s a very disappointing number,” Ablin said.
“This is a setback for the market, this is a setback for the economy. It is all but certain the Fed will raise rates three quarters of a percentage point this month. And it increases the likelihood of recession.”
About 15 minutes into trading, the Dow Jones Industrial Average was down 1.1 percent at 30,638.51.
The broad-based S&P 500 fell 1.2 percent to 3,773.15, while the tech-rich Nasdaq Composite Index shed 1.3 percent to 11,587.58.
Among individual companies, Delta Air Lines fell 5.8 percent after reporting lower-than-expected earnings, as spiking fuel prices offset some of the gains from strong consumer demand for flying.