US stocks erase early gains, close lower as inflation data spurs questions about the Fed’s next move

US stocks erase early gains, close lower as inflation data spurs questions about the Fed’s next move

US stocks erased earlier gains Tuesday even after key inflation data revealed prices rose less than expected in August. All sectors in the S&P 500 closed in the red while Apple sunk 1.37%. The Dow Jones Industrial Average fell almost 300 points. - a popular measure of nationwide price growth - gained 0.3% last month. That was less than the 0.4% jump expected by economists and reflected a slowdown from July's 0.5% increase. While the data indicates a return of runaway inflation is unlikely, that doesn't mean there aren't risks to inflation running a bit too hot for too long, said Rick Rieder, BlackRock's CIO of global fixed income. He pointed to supply shocks and rapid price increases in household goods and housing as contributors to the slumping consumer sentiment in the US. "The Fed should outline a tapering program, as we appear to already be close to maximum employment and simultaneously may be running the risk of overheating on inflation," Rieder said. The chief equity strategists at both RBC and Morgan Stanley are warning of an upcoming stock market correction. said valuations are becoming stretched and the S&P 500 could decline up to 10% before the end of the