U.S. stocks extend an inflation-driven slide as investors weigh the Fed’s next policy move

U.S. stocks extend an inflation-driven slide as investors weigh the Fed’s next policy move

U.S. stocks closed lower on Thursday, extending an inflation-driven slide that began with the S&P 500 down more than 4% on Tuesday.

August’s CPI inflation report, which beat expectations, has now shifted investors’ attention to what the Federal Reserve will do about interest rates at next week’s Federal Open Market Committee meeting. Most investors currently expect another excessive rate hike of 75 basis points, but some think the Fed should raise rates by a full 100 basis points to tame inflation.

Inventories were briefly higher in early trading Thursday after weekly jobless claims last week fell for a fifth straight week to 213,000. That was below economists’ estimates for 227,000 jobless claims and a sign that the labor market remains strong as businesses look to fill vacancies.

Here’s where the U.S. indexes stood at Thursday’s close at 4:00 PM ET:

  • S&P 500: 3,901.35, down 1.13%
  • Dow Jones Industrial Average: 30,961.82, down 0.56% (173.27 points)
  • Nasdaq Composite: 11,552.36, down 1.43%

Here’s what’s happening today:

  • Railroad stocks rose after unions struck a deal to avert a strike, with CSX, Norfolk Southern and Union Pacific gaining about 3%.
  • Apple has unseated Tesla as the most shorted U.S. stock — after Elon Musk’s company held the title for 864 days, according to data from S3 Partners.
  • Patagonia’s founder is giving away his billion-dollar company, making sure all profits go to fighting climate change.
  • The Ethereum blockchain completed its Merge upgrade early Thursday, co-founder Vitalik Buterin said. Ether fell as much as 9% as the merger was seen as a “sell the news” event.
  • Billionaire investor Ray Dalio predicts the Fed will raise interest rates to at least 4.5% — and warns that a Great Recession coupled with a 20% selloff in the stock market is likely.
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In commodities:

  • West Texas Intermediate crude fell 3.57% to $85.32 a barrel. Brent crude, the international oil benchmark, fell 3.29% to $91.00.
  • Gold fell 2.14% to $1,672.50 an ounce. The yield on the 10-year Treasury note rose 5 basis points to 3.46%.
  • Bitcoin fell 1.14% to $19,796. Ether fell 6.50% to $1,502.

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