The Federal Reserve raised interest rates for the first time since July 2023 on Wednesday, and the S&P 500 (SNPINDEX: ^GSPC) immediately dropped. It rose again before the day was over, but it's been steadily declining over the past month since hitting a high in mid-August.
There are a number of reasons for the fall, and part of that has been the anticipation of rate hikes. The Fed's decision has a lot to do with the other reasons, including high inflation and rising oil prices, and none of these spell enthusiasm for the market. Here's how the inflation outlook and accompanying interest rates signal a warning for investors.
Missed AI's "Act 1"? Act 2 Could Be 15x Bigger. Most investors think they missed the AI boat because they didn't buy Nvidia in 2005. But according to our **** ysts, we're only at the end of "Act 1"—the R&D phase. "Act 2" is the global rollout. Continue »
The simple version is that rising oil prices increase production costs, leading to higher consumer prices. The artificial intelligence (AI) buildout is contributing as well; memory prices are skyrocketing as hyperscalers have an insatiable demand for scarce memory products, and Apple, for example, said it's going to raise some prices.
As inflation surges and prices go up, it's harder for shoppers to keep spending. The worry is that lower consumer spending will lead to sagging sales for many companies, and the market is pricing that in as the inflation outlook persists.
#inflation #since #high #market
There are a number of reasons for the fall, and part of that has been the anticipation of rate hikes. The Fed's decision has a lot to do with the other reasons, including high inflation and rising oil prices, and none of these spell enthusiasm for the market. Here's how the inflation outlook and accompanying interest rates signal a warning for investors.
Missed AI's "Act 1"? Act 2 Could Be 15x Bigger. Most investors think they missed the AI boat because they didn't buy Nvidia in 2005. But according to our **** ysts, we're only at the end of "Act 1"—the R&D phase. "Act 2" is the global rollout. Continue »
The simple version is that rising oil prices increase production costs, leading to higher consumer prices. The artificial intelligence (AI) buildout is contributing as well; memory prices are skyrocketing as hyperscalers have an insatiable demand for scarce memory products, and Apple, for example, said it's going to raise some prices.
As inflation surges and prices go up, it's harder for shoppers to keep spending. The worry is that lower consumer spending will lead to sagging sales for many companies, and the market is pricing that in as the inflation outlook persists.
#inflation #since #high #market
2 days ago
