BUSINESS + ECONOMY

Dow closes down more than 500 points

Feb 14, 2024, 1:00 PM | Updated: Mar 20, 2024, 9:53 am

Dow...

Trader peter Tuchman works on the floor of the New York Stock Exchange, in 2020. (AP Photo/Richard Drew)

(AP Photo/Richard Drew)

SALT LAKE CITY — On Tuesday, the Dow Jones Industrial Average sank over 750 points before closing down by 524 points or 1.35%, ending the day at 38,272. This marked its worst session since March 2023 on a percentage basis, according to CNBC reports.

According to data released by the Bureau of Labor Statistics, the latest Consumer Price Index revealed that prices rose by 3.1% for the 12 months ending in January, a slight decrease from the 3.4% in December. CPI rose by 0.3% last month, according to CNN

Economists were expecting both rates to come in lower.

Core prices, which exclude volatile food and energy components, rose 0.4% monthly and 3.9% from a year ago, CNBC reported. 

Inflation is stubborn

Jeff Cox, economics editor for CNBC.com, joined Inside Sources host Boyd Matheson to find out what’s happening with Americans’ money.

“Target headline inflation is still stuck at 3.1% . . . the expectation had been for it to fall to 2.9%,” Cox said.

He added that the Federal Reserve still needs more data showing that inflation is moving downward.

Federal Reserve Chairman Jerome Powell said an interest rate cut is unlikely to happen soon.

“I think it’s not likely that this committee will reach that level of confidence in time for the March meeting, which is in seven weeks,” Powell told Scott Pelley during a “60 Minutes” interview earlier this month.

Cox said the next rate cut is more likely to occur in June.

“The rate cuts that everybody had been counting on — of getting back to a more normal monetary-policy regime — that looks like it’s further out into the future, again at least until June,” he explained

The markets were counting on an interest rate cut and since that hasn’t transpired, investors recoiled.

“Is this a one-day thing? Is it something that we’ll see longer-term effects? Hard to say right now. This could be just a knee-jerk reaction. But it is basically a recalibration here for the market,” Cox said.

Looking at the big picture, he said, the unemployment rate now stands at 3.7%, and both economic growth and corporate profit remain strong.

Boyd pointed out that the markets can handle bad news, but it’s volatility and uncertainty that are confounding.

 Adding to the unpredictability are two presidential candidates who are not politically appealing to most voters, Cox said.

“Well, we’re very high on the uncertainty scale right now. We don’t know what’s next for monetary policy. We’re not really sure what’s next for fiscal policy. We don’t know what’s really going to happen in terms of the political landscape . . . and so all of this creates a tough environment for the market,” he said.

Related: Romney and Moore look to tame $34 trillion U.S. debt

 

Inside Sources with Boyd Matheson can be heard weekdays from 1 p.m. to 3 p.m. on KSL NewsRadio. Users can find the show on the KSL NewsRadio website and app.

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Dow closes down more than 500 points