Major stock markets in the United States closed lower on Thursday, following the latest European Central Bank’s monetary policy statement. In addition, International Monetary Fund revealed they may cut down the global growth forecast for the third time this year. Furthermore, the figures of the initial jobless claim report in the United States increased by 27,000 to 229,000 in the week ending June 4. The Dow Jones Industrial Average index closed with a 1.94% or a 639-point loss, with the Boeing Company being its worst performer at 4.23%. Nasdaq 100 decreased 2.74% and the S&P 500 was 2.38% lower at the end of trading, both pulled down by Moderna Inc’s 9.76% loss. Rate-sensitive growth stocks are under pressure as the benchmark U.S. 10-year Treasury yield climbed to as much as 3.07%, its highest level since May 11. Inflation worries came to the fore ahead of the U.S. consumer price index (CPI) report on Friday as Brent crude prices rose above $123 a barrel. “There is a straight line read from higher prices at the pump for the U.S. consumer to higher U.S. inflation,” said Huw Roberts, head of analytics at Quant Insight.
“The hope was that Friday’s CPI report would be ammunition for the peak inflation argument and the crude oil move is upsetting that.” Consumer prices are expected to have risen 0.7% in May, while the core consumer price index, which excludes the volatile food and energy sectors, rose 0.5% in the month. Investors fear a hot reading on inflation could keep the U.S. Federal Reserve on its path to raise interest rates aggressively against the backdrop of a volatile stock market, strong consumer spending and tight labor conditions. “Right now, we are at the confluence of four headwinds – a slowdown in economic growth rate in the United States, Fed tightening monetary policy, a rise in interest rates and a red hot inflation,” said David Sekera, chief U.S. market strategist, at Morningstar. NN: Tomorrows CPI report has become larger then life. I have a strategy to complicated for individuals. I do not want to tip me hand… That is why the 2 weeks of silence. After the report all will be revealed to you.