Dow Jones falls on inflation surprise; ASX expected to decline
US inflation exceeded forecasts, weighing on US stock markets and expected to pressure Australia's ASX.
A report showing US inflation running hotter than expected sent US stock markets tumbling on Tuesday. The S&P 500 fell 0.8 per cent, the Dow Jones dropped 0.6 per cent, and the Nasdaq slipped 1.3 per cent.
The Australian sharemarket is expected to follow suit, with futures pointing to a 0.7 per cent fall at open. Investors are betting the Federal Reserve will raise its main interest rate by double the usual amount at its December meeting to combat inflation.
Higher interest rates make borrowing expensive and push down stock valuations.
- 0.8%
- S&P 500 decline
- 0.6%
- Dow Jones decline
- 1.3%
- Nasdaq decline
- 0.7%
- ASX expected decline
Why it mattersHigher US interest rates flow through to Australian mortgages and loans, and Australian investor portfolios are exposed to the ASX's decline.
AustraliaAustralian sharemarket investors face losses at open, and rising global interest rates could increase mortgage costs for Australian borrowers.
✓ Claims checked against the source. checked 8 h ago
