FX.co ★ Inflation is evident: US stock indicators are falling

US stock indicators closed lower during trading on Wednesday. The broad S&P 500 lost 0.82%, the Dow Jones Industrial Average was down 0.7% and the NASDAQ Composite was down 1.66%.

The main cause of investor concern is the high rate of inflation. According to statistics, last month the inflation rate hit a record high in the last 30 years. The inflation rate in annual terms was 6.2%, which exceeded analysts' forecasts of 5.8%. The reasons for such significant growth were supply problems caused by the COVID-19 pandemic, as well as increased consumer demand, which had a strong impact on prices.

Notably, several days ago US stock indicators were rising and hit all-time highs due to excellent results of the companies' financial statements for the third quarter. This aspect considerably strengthened the markets and gave investors confidence that the economy was gradually recovering after the pandemic.

Despite increasing inflation, analysts believe companies are managing quite well by shifting rising prices to end consumers. This aspect mostly refers to large companies that are well-versed in various pricing techniques. Therefore, inflation cannot affect their stocks much.

Investors believe the US Federal Reserve may decide to raise interest rates amid rising consumer prices. Consequently, the profitability of government bonds with short maturities will increase. At the moment, profitability has risen from 0.409% to 0.503%. It has also increased for 10-year bonds (up to 1.558%).

Among the constituents of the Dow Jones indicator, the stocks of Merck & Comp. Inc. (+1.37%), Visa Inc. Class A (+1.31%), American Express Comp. (+1,15%) added the most. The shares of Nike Inc. (-3.26%), Salesforce Inc. (-3.13%) and Apple Inc. (-1,83%) dropped the most.

Among the constituents of the S&P 500, the stocks of Ventas Inc. (+3.60%), MasterCard Inc. (+3.59%) and Alliance Data Systems Corp. (+3,37%) gained considerably. The shares of Perrigo Comp. PLC (-12.29%), Advanced Micro Devices Inc. (-6.12%) and Coterra Energy Inc. (-5,85%) plunged dramatically .

Among the components of the NASDAQ indicator, RenovoRx Inc., Nisun International Enterprise Development Group Co., Ltd. and Unity Biotechnology Inc. showed the biggest gains with their shares surging 48.80%, 31.94% and 30.35% respectively. Hycroft Mining Holding Corp. (-37.50%), Yumanity Therapeutics Inc. (-34.79%) and Anpac Bio Medical Science Co. (-32,93%) dropped the most.

On the New York Stock Exchange, the number of shares that lost ground (2,159) exceeded the number of shares that gained ground (1,091). The same situation is on the NASDAQ with 2,608 stocks falling while only 1,114 gained.

The volatility index hit its all-month highs.

Gold futures rose by 0.92% to $1847.70 a troy ounce. WTI oil fell by 3.48% to $81.22 per barrel. Brent oil futures also went down 2.69% and settled at $82.50 per barrel.

At the same time, stock indices in the Asia-Pacific region also declined mostly. The Shanghai Composite was down 0.4%, Japan's Nikkei 225 dropped 0.6%, while the Hang Seng gained 0.7%. The European region STOXX Europe 600 also went up slightly (0.2%).