US indices collapsed after the release of inflation data

According to the US Department of Labor, consumer prices rose by 8.3% year-on-year in August. Compared to the previous month, the indicator decreased (it was 8.5%), but it turned out to be worse than expected – analysts predicted a decrease to 8.1%. At the same time, on a monthly basis, the value of price inflation increased seasonally adjusted by 0.1%, while in July the indicator did not change, and a decrease of 0.1% was forecast for August.

Against the background of the publication of inflation data, the main indices of the US market significantly decreased at the beginning of trading. 

The S&P 500 index falls 2.26% to 4,017.62 points.

The Dow Jones index loses 1.9% to 31,766.71 points.

The NASDAQ 100 index is down 3.07% to 11,889.93 points.

The stock market reacted sharply negatively due to the growing likelihood of maintaining the US Federal Reserve's tough approach to raising rates. Now forecasts for further tightening of monetary policy and a 75bp rate hike are 86%. 

However, there is a risk that the US economy will slide into recession if the central bank goes too far. Higher rates reduce inflation by raising the cost of borrowing for consumers and businesses and thus slow down the economy.