Dow rises 100 points after Monday’s bloodbath
Stocks rose just after the opening bell Tuesday, erasing an early deficit after the US government reported a bigger uptick in a key measure of consumer prices than expected.
The Dow was up more than 100 points in early trading following Monday’s nearly 400-point drop. But the tepid rebound is a sign that investors are still nervous. The S&P 500 and Nasdaq were both slightly higher as well.
The consumer price index (CPI) numbers could complicate things for the Federal Reserve, which recently cut interest rates for the first time since 2008 and is expected to lower rates further due to a sluggish global economy that’s hurting as a result of the US-China trade war and weak demand in the UK and Europe.
The so-called core CPI, which excludes food and energy costs, rose more than forecast for the second straight month and has now increased 2.2% over the past year. That’s the biggest increase in six months.
The Fed typically raises rates when inflation is creeping higher, but the central bank has been criticized by President Trump for possibly hiking rates too aggressively in the past few years and being too slow to cut rates in 2019.
The return of market volatility in recent weeks is unnerving investors, especially those looking to save for retirement. That’s especially the case since stocks have been the only game in town for conservative investors.
Bond yields have continued to plunge. The benchmark US-10 Year Treasury is now hovering around 1.64%, its lowest level in about three years, while the 30-Year Treasury is approaching an all-time low near 2.1%.
Yields in the UK are near zero as well while long-term rates in Japan and much of Europe are now in negative territory.