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Wall Street tumbles on disappointing inflation data, Asian markets set to fall

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US stocks dived amid hotter-than-expected inflation data. The US CPI for August printed at 8.3%, well above analyst estimates of 8.1%, though it slowed from 8.5% in July.  The short-term bond yield spiked on strengthened odds for another supersized rate hike by the Fed next week, possibly a full percentage. The US 2-year bond yield surged to 3.75%, the highest seen in December 2007. The US dollar reversed the last few days' losses, with the dollar index surging 1.5%, while both gold and oil fell on a strong USD.  

Source: bloomberg, CoinMarketCap
  • Dow fell 3.94%, S&P 500 slumped 4.32%, and Nasdaq dived 5.16%. All the 11 sectors in the S&P 500 closed in red, with growth stocks leading losses. Apple fell 5.9%, Amazon tumbles 7%, and Meta Platforms plunges 9.3%. 
  • Twitter shareholders voted to approve Elon Musk’s $44 billion bid after the company sued Musk for breaching the agreement earlier in August, with the trial to begin in October.
  • All the APAC currencies tumbled against the US dollar, while the Eurodollar fell below the parity level. Both AUD and NZD slashed by more than 2% against the greenback. USD/JPY bounced back to above 144, and the Chinese Yuan pared the last few days’ gains, falling to 6.98 against the USD this morning.   
  • Asian stock marketsare set to plunge as risk-off prevails. ASX futures decline 2.20%. Nikkei225 futures slump 2.68% and Hang Seng Index futures are down 2.34%. The US and EU are considering imposing sanctions on Taiwan affairs, which intensifies the geopolitical tension, adding pressure on risk assets.
  • Crude oil prices bounced off the day-lows, while gold slumped on a spike in the USD due to the disappointing US inflation data. The resilient moves in oil prices suggest that undersupply is still a primary issue in the physical markets, especially after OPEC kept its positive demand outlook on Tuesday.
  • Bitcoin plunged 9% due to the turnaround in risk assets, and Ethereum fell more than 6% in the last 24 hours, as Cryptocurrencies snapped a multiple-day winning streak due to the broad selloff in risk assets. 

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