US stocks slip as inflation data tempers rate cut expectations – London Business News | Londonlovesbusiness.com

The US stock market slipped on Wednesday as investors processed the latest consumer inflation report, which showed mixed results.

While core inflation rose slightly in August, the annual rate remained steady at 3.2 percent. The overall inflation eased to 2.5 percent, marking the fifth consecutive decline and reaching the lowest since February 2021.

The data reinforced bets that the Federal Reserve might lower interest rates by 25 basis points, with the market currently pricing in an 85% probability. Market sentiment was also influenced by ongoing uncertainty surrounding the US elections, which is expected to create some market volatility due to a lack of clarity on key policy issues.

Regarding sector performance, the energy sector was the worst performer yesterday and continued its decline as oil prices could remain under pressure amid fears of lower demand.

Real estate sector also struggled on Wednesday, impacted by market repricing following the CPI data, which affected interest rate-sensitive sectors. This repricing came after hopes for a larger rate cut, which would have led to lower mortgage rates, were dashed. Additionally, crypto-related stocks declined as Harris seemed to emerge as a victor in Tuesday’s debate against Trump who is viewed as pro-crypto.