The January US inflation figure surprised on the upside, rising by 7.5% over the year to January, beating consensus expectations of 7.2% and picking up pace from the 7% annual rise posted in December. It was the highest inflation figure since 1982.
The market was annoyed enough at the higher-than-expected figure – which by itself implied that the next rate hike would not be the standard 25-basis-point rise, but more like 50 basis points – but really got in a funk afterwards when St. Louis Federal Reserve President James Bullard told Bloomberg News that he would like to see the benchmark lending rate hit 1% by July.
The broad S&P 500 index lost 1.8% while the 30-stock Dow Jones Industrial Average slid by 1.5% and the tech-heavy Nasdaq index fell by 2.1%.
In Europe overnight, London’s FTSE-100 index rose by 29 points, or 0.4%, to 7,672.4, while the Euro Stoxx 50 index eased 4.8 points, or 0.1%, to 4,199.3.
Disney beats expectations
Dow Jones component Disney (NYSE: DIS) bucked the trend, rising by 8% in extended trading.
Disney’s revenue rose by 34% to US$21.8 billion in the quarter ended January 1, beating the analysts’ consensus estimate of US$20.9 billion.
Net income from continuing operations was US$1.15 billion, or 63 cents per share, in the quarter, compared with a net income of just US$29 million, or 2 cents per share, a year earlier.
US stock market movers
These US stocks were among the biggest movers on Thursday.
- Grab (NASDAQ: GRAB) up 14.4%
- Datadog (NASDAQ: DDOG) up 12.2%
- Uber (NYSE: UBER) down 6.1%
- Credit Suisse (NYSE: CS) down 9.4%
- DoorDash (NYSE: DASH) down 9.5%
- Affirm (NASDAQ: AFRM) down 21.4%
This negative lead from US stock market is set to send the S&P/ASX 200 (ASX: XJO) lower at the open this morning. For a round-up of the latest news, check out my ASX 200 morning report.
