- US CPI weighs on US stocks with all three benchmarks losing ground.
- Falling yields for benchmark US Treasuries pressured financial stocks.
US stocks have been losing ground on Tuesday as investors looked past lower-than-expected inflation data, focusing instead on economic uncertainties and growing chances of a corporate tax rate hike.
August's Consumer Price Index rose in the smallest gain since February and followed a 0.3% rise in July. The so-called core CPI increased 4.0% on a year-on-year basis after advancing 4.3% in July. The dollar index fell 0.1% to 92.498 further retreating from more than a two-week high on Monday.
The less-than-expected rise in US inflation last month is creating uncertainty as to the timing of the Federal Reserve's tapering of asset purchases. Several Fed officials have suggested that the US central bank could reduce buying debt securities by the end of the year.
US stocks bleed
The benchmarks, S&P 500, Dow Jones and the NASDAQ, initially bumped higher following the Labor Department's consumer price index report, but optimism quickly faded and they turned negative in a reminder that September is a historically rough month for stocks. Dropping yields for benchmark US Treasuries pressured financial stocks and investors moved back to growth at the expense of value.
Meanwhile, the Dow Jones Industrial Average fell 226.96 points, or 0.65%, to 34,642.67; the S&P 500 shed 16.76 points, or 0.38%, at 4,451.97 and the Nasdaq Composite is loaing 22.32 points, or 0.15%, to 15,083.26.
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