September 23, 2021, 20:06

    Wall St slips as tax uncertainty outweighs easing inflation worries

    Wall St slips as tax uncertainty outweighs easing inflation worries

    • August CPI grows at slowest pace in six months
    • Energy, financials retreat from early gains
    • Indexes down: Dow 0.32%, S&P 500 0.21%, Nasdaq 0.03%

    Sept 14 (Reuters) – Wall Street indexes fell on Tuesday on uncertainty over a possible increase in corporate taxes, even though slowing growth in monthly consumer prices eased some fears of the Federal Reserve reducing stimulus early.

    Sectors including energy (.SPNY) and financials (.SPSY) pulled back from their strong gain in the previous session and were the worst performers in early trading.

    Major technology stocks continued to lag their broader peers and U.S.-listed Chinese firms dropped further as investors remained wary of regulatory shocks from Beijing.

    Focus is now on the potential passage of U.S. President Joe Biden's $3.5 trillion budget package, which is expected to include a proposed corporate tax rate hike to 26.5% from 21%. read more

    A possible hike in corporate taxes is yet another uncertainty, along with recent concerns over slowing economic growth due to rising COVID-19 cases.

    Meanwhile, data from the Labor Department showed underlying consumer prices rose at their slowest pace in six months in August, suggesting that inflation had probably peaked. July's reading had also shown a slight slowdown in price increase. read more

    But consumer price inflation is still at high levels. Along with strong producer prices last week and some discord among Fed members over when to begin tapering, it meant investors were still uncertain over the policy shift.

    "It doesn't force the Fed's hand, so there's a possibility that the Fed could drag its feet and when they do announce tapering, it may be smaller than what the Street may be looking for that time," said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut.

    "I'm not thinking that they do any tapering in September, but I'm not sure where their heads are all at. If it's up to (Fed Chair) Powell, he'll wait till November. But other Fed members seem to be on different pages."

    At 10:12 a.m. ET, the Dow Jones Industrial Average (.DJI) fell 110.28 points, or 0.32% , to 34,759.35, the S&P 500 (.SPX) lost 9.54 points, or 0.21 %, to 4,459.19 and the Nasdaq Composite (.IXIC) lost 4.14 points, or 0.03 %, to 15,101.35.

    Market participants now expect a substantial correction in stock markets by the end of the year, with some investors turning bearish on a global economic recovery. read more

    Among individual stocks, CureVac fell more than 3% after the German biotechnology firm canceled manufacturing deals for its experimental COVID-19 vaccine with two prospective partners, after rivals with approved shots boosted production. read more

    Declining issues outnumbered advancers by a 1.4-to-1 ratio on the NYSE and by about a 1.5-to-1 ratio on the Nasdaq.

    The S&P 500 posted 2 new 52-week highs and one new low while the Nasdaq recorded 44 new highs and 42 new lows.

    Reporting by Ambar Warrick in Bengaluru; Additional reporting by Devik Jain; Editing by Arun Koyyur


    Related posts

    Leave a Reply

    Your email address will not be published. Required fields are marked *

    We use cookies in order to give you the best possible experience on our website. By continuing to use this site, you agree to our use of cookies. You can find a detailed description in our Privacy Policy.
    Privacy Policy