ASX set to fall as inflation sends Wall Street lower. Nvidia jumps
The S&P 500 was virtually unchanged in midday trading and just a bit below its all-time high, even as more than four out of every five stocks within the index fell. The Dow Jones was down 253 points, or 0.6 per cent, as of noon Eastern time, and the Nasdaq composite was 0.7 per cent higher and on track to set another record.
The Australian sharemarket is set to retreat, with futures at 5.06am AEST pointing to a loss of 56 points, or 0.7 per cent, at the open. The ASX rose by 0.7 per cent on Tuesday. The Australian dollar is 0.5 per cent lower at 65.15 us cents at 5.17am.
US stocks felt pressure from a report showing inflation in the United States accelerated to 2.7 per cent last month from 2.4 per cent in May. Economists pointed to increases in prices for clothes, toys and other things that tend to get imported from other countries. Their prices could be rising because of the tariffs that President Donald Trump has imposed on countries worldwide in hopes of getting them to open their markets further to US products.
'Inflation has begun to show the first signs of tariff pass-through,' according to Ellen Zentner, chief economic strategist for Morgan Stanley Wealth Management.
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To be sure, the inflation rate reported on Tuesday morning wasn't far from what economists expected. And an underlying measure of inflation that economists think is a better predictor of future trends accelerated by less than feared.
Altogether, the data helped caused Treasury yields to yo-yo a few times in the bond market before they began rising.
The yield on the 10-year Treasury climbed to 4.47 per cent from 4.43 per cent late Monday. The yield on the two-year Treasury, which more closely tracks expectations for what the Federal Reserve will do with short-term interest rates, rose to 3.94 per cent from 3.90 per cent.
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