Dow Drops More Than 1,200 Points, Its Lowest Day Since June 2020
Stocks took a dive on Tuesday in the wake of news regarding inflation.
As of market close on Tuesday, the Dow Jones Industrial Average was down 1,276 points, or 3.9%, marking its worst day since June 2020.
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The S&P 500 slid about 4.3% and the Nasdaq Composite was down more than 5%. Footwear stocks slid across the board as well, with Nike and Adidas down almost 6%, Caleres down 6.1%, and Foot Locker and Genesco down close to 5%.
The Bureau of Labor Statistics reported on Tuesday morning that prices in August increased 8.3% year over year, or 0.1% from July. Excluding volatile food and energy costs, prices rose 0.6% from July and 6.3% from the same month in 2021.
The inflation update, while marking a slowdown from the 8.5% year over year in July, caused a stock sell off on Tuesday morning, with the Dow, the S&P 500 and the Nasdaq Composite all down.
Online prices in August increased 0.4% year-over-year and 2.1% on a monthly basis, according to a Monday report from Adobe.
In a note to clients on Tuesday, Neil Saunders, managing director of consulting firm GlobalData, said that this new data “sends a helpful signal” to consumers, which is calming some concern about ever-increasing prices. However, Saunders added that the benefit is “somewhat marginal” given that the cost of living remains very elevated compared to a year ago.
Data from the Footwear Distributors and Retailers of America (FDRA) suggests that footwear prices are showing some signs of moderating as well. In August, footwear retail prices rose 5% over the past year, slower than the 7% posted in February, the second-highest increase in 33 years. Men’s footwear prices rose 4%, women’s climbed 4.9% and kids’ expanded 6.8%.
The Federal Reserve is expected to once again impose a 0.75 percentage point hike in interest rates when it meets later this month to help curb inflation.
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