Media stocks and broader markets swooned Tuesday with all three major indexes posting their worst session since June of 2020 on news that consumer prices last month rose more than expected.
The brutal selloff hit tech and media stocks hard with Apple, Roku and Google down about 6%, Amazon and Snap off 7%, Spotify losing more than 8% and Facebook 9%.
Netflix retreated 7%, as did Paramount Global. Comcast shed 6%, Lionsgate close to 5% and Disney nearly 4%. Warner Bros. Discovery shares dipped 2.7%
The DJIA surrendered 1,276 points, or nearly 4%. The Nasdaq dropped by more than 5%, and the S&P 500 4.3%.
Inflation – which hit a 40-year high earlier this year — is the culprit.
The Bureau of Labor Statistics released its Consumer Price Index (CPI) for August early today and it showed smaller than expected declines. Prices rose 8.3% over the prior year and 0.1% over the prior month. Economists had anticipated an 8.1% increase on the year, and a decline of 0.1% over the month.
The Federal Reserve has been hiking interest rates to cool things down. Today’s inflation numbers mean another rate increase, likely another 0.75%, is all but certain next week when the Fed meets.
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