US stocks tumble on inflation data
Wall Street stocks sank on Friday after inflation exceeded expectations in a much-anticipated report that sets the stage for more monetary tightening. The Dow Jones  dropped 2.7 percent to 31,392, the S&P 500 shed 2.9 percent to 3,900, and the Nasdaq tumbled 3.5 percent to 11,340. Friday's report showed the consumer price index (CPI) jumped 8.6 percent compared to May 2021, topping analyst estimates and up from 8.3 percent in the 12 months ending in April. White House officials had warned in recent days that they expected a downcast report as gasoline prices hit new records daily amid the fallout from the war in Ukraine. Prices continued to rise last month for a range of goods, including housing, groceries, airline fares and used and new vehicles, and annual inflation remains at its highest rate since late 1981. "The market had expected that we'd see at least a plateauing or flattening out of inflation but it seems that inflation pressures continue to build and we've seen a further broadening of price pressures in this report," said Shaun Osborne, a foreign exchange specialist at Scotiabank. "So it seems more entrenched, stickier kind of price or inflation situation." Osborne said the report will encourage investor debate on whether the Federal Reserve will shift to a 75 basis point interest rate hike next week instead of the planned 50 basis point increase.  He believes the Fed will go with its original plan, considering a bigger increase would look "panicky." (AFP)