By Liz Moyer
Investing.com -- U.S. stocks wobbled on Wednesday but ended the day higher, a day after a market rout induced by a hotter-than-expected inflation report for August.
Tuesday’s sharp drop – tech stocks sold off 5% – was the worst since June 2020. Investors had hoped a cooler inflation report would encourage the Federal Reserve to act less aggressively on interest rates as it tries to tame inflation.
Now, the market is expecting the central bank to raise its benchmark rate by a 0.75 percentage point when it meets next week, and there is increasing sentiment that the Fed may raiseby a full point.
Fed officials in recent weeks have said they would do whatever it takes to tame still stubborn inflation, even if that means pain to the economy. While gasoline prices have fallen from their peak in June, food prices continue to climb, pinching household budgets.
Another inflation measure, the producer price index , dropped 0.1% in August from the month before, meeting expectations.
Transportation, seen as a sector of stability, has been in turmoil with a looming railroad strike as administration officials scrambled to avert a shutdown. Union Pacific Corporation (NYSE: UNP ) shares fell nearly 4% on Wednesday, and Norfolk Southern Corporation (NYSE: NSC ) fell 2%.
Tech stocks sold off sharply on Tuesday and some continued to decline on Wednesday. Meta Platforms Inc (NASDAQ: META ), the Facebook parent, is down 1% after falling more than 9% a day earlier.
Starbucks Corporation (NASDAQ: SBUX ) shares rose 5.5% a day after telling investors it expected double-digit revenue growth in coming quarters.
Retail sales are expected out Thursday morning, with analysts looking for an August month-over-month gain of 0.2%.
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