This post was originally published on this site
Investing.com — U.S. stock markets opened mostly lower on Tuesday after another higher-than-expected producer price inflation print reinforced fears that the Federal Reserve will speed up the tightening of monetary policy at its meeting this week.
U.S. producer prices rose 9.6% in the year through November, with a thumping 0.7% monthly rise underlining the fact that this is not just down to base effects from a pandemic-distorted year. Core prices rose 0.7% on the month and by 7.7% on the year. That comes hot on the heels of data last week showing consumer inflation running at a near-40% high.
By 9:45 AM ET (1445 GMT), the Dow Jones Industrial Average was up 44 points, or 0.1% at 35,695 points, but the S&P 500 was down 0.4% and the Nasdaq Composite was down 0.9%, both extending Monday’s losses.
Analysts expect the Fed will accelerate the phase out of its bond purchases, meaning that financial markets could go from seeing $120 billion in liquidity creation a month to zero in as little as three or four months. That tightening of liquidity conditions is likely to push up money market rates even before the Fed starts to raise official ones.
Among major movers, Tesla slid further below the $1,000 mark as CEO Elon Musk continued to reduce his holdings. Musk sold another $906 million worth of stock on Monday, according to an SEC filing. Tesla (NASDAQ:TSLA) stock was down 1.4% at $952.52.
Apple (NASDAQ:AAPL) stock meanwhile inched closer to the $3 trillion valuation mark, rising 0.1% after price target upgrades from Morgan Stanley (NYSE:MS) and Evercore.
