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US markets settle lower despite cooler-than-expected inflation reading

15 Sep 2021 Evaluate
The US markets ended lower on Tuesday despite cooler-than-expected inflation reading. A highly anticipated report released by the Labor Department showed a modest increase in US consumer prices in the month of August. The Labor Department said its consumer price index rose by 0.3 percent in August after climbing by 0.5 percent in July. Street had expected consumer prices to increase by 0.4 percent. The consumer price growth was partly due to another sharp increase in energy prices, which spiked by 2.0 percent in August after jumping by 1.6 percent in July. Gasoline prices led the way higher, soaring by 2.8 percent. Excluding food and energy prices, core consumer prices inched up by just 0.1 percent in August after rising by 0.3 percent in July. Street had been expecting another 0.3 percent increase. 

Higher prices for household operations and shelter contributed to the uptick in core prices, which reflected the smallest increase since February. A 9.1 nosedive in prices for airline fares limited the upside for core prices along with lower prices for used cars and trucks and motor vehicle insurance. The report also showed a slowdown in the annual rate of consumer price growth, which dipped to 5.3 percent in August from 5.4 percent in July. The annual rate of core consumer price growth also slowed to 4.0 percent in August from 4.3 percent in the previous month.

Dow Jones Industrial Average fell 292.06 points or 0.84 percent to 34,577.57, Nasdaq dropped 67.82 points or 0.45 percent to 15,037.76 and S&P 500 was down by 25.68 points or 0.57 percent to 4,443.05.

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