By Liz Moyer
Investing.com -- U.S. stocks edged 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.
Tech stocks sold off sharply on Tuesday and some continued to decline on Wednesday. Meta Platforms Inc (NASDAQ: META ), the Facebook parent, is down 1.4% after falling more than 9% a day earlier.
Starbucks Corporation (NASDAQ: SBUX ) shares rose 5.7% a day after telling investors it expected double-digit revenue growth in coming quarters.
Add Chart to Comment
We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
- Enrich the conversation
- Stay focused and on track. Only post material that’s relevant to the topic being discussed.
- Be respectful. Even negative opinions can be framed positively and diplomatically.
- Use standard writing style. Include punctuation and upper and lower cases.
- NOTE: Spam and/or promotional messages and links within a comment will be removed
- Avoid profanity, slander or personal attacks directed at an author or another user.
- Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
- Only English comments will be allowed.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.