US Stocks Plummet as Inflation Fears Mount
US stocks closed lower on Thursday after producer price data for August and rising oil prices fueled concerns about inflation, leading investors to bet on a higher chance of interest rate hikes by the Federal Reserve. The S&P 500 fell 0.58% to end at 7,591.75 points, while the Nasdaq declined 0.65% to 26,081.73 points and the Dow Jones Industrial Average dropped 0.60% to 52,064.10 points.
Disruptions in oil supply routes through the Strait of Hormuz and the Red Sea contributed to a 6% surge in Brent crude prices to $US107 a barrel. Higher yields on Treasury notes also raised concerns about inflation, with 10-year note yields hitting their highest level in nearly three years. This has investors pricing in a 70% chance of the Fed hiking interest rates by at least 25 basis points next week.
Chip makers Nvidia and Micron Technology were among the worst performers, losing 2.3% and 4.7%, respectively, while Apple rallied 3.6% after launching a new iPhone model. The S&P 500 has now fallen nearly 3% from its record high close on August 13.