Wall Street retreats after early boost, closing lower

Traders work on the floor at the New York Stock Exchange in New York City.
Traders work on the floor at the New York Stock Exchange in New York City.PHOTO: REUTERS

NEW YORK (AFP) - United States shares reversed course after an early bout of enthusiasm, closing sharply lower on Tuesday (Sept 14) despite data indicating inflation pressures are easing.

After breaking a five-day losing streak Monday, the Dow Jones Industrial Average dropped 0.8 per cent to finish the day at 34,577.57.

The broad-based S&P 500 fell 0.6 per cent to close at 4,443.05, while the tech-rich Nasdaq Composite Index lost 0.5 per cent to 15,037.76.

LBBW Bank's Karl Haeling said there did not seem to be a major catalyst for the decline other than some "caution" about the cases of the Delta variant of Covid-19 and the expectation that the Federal Reserve will soon start to remove some stimulus.

"It's natural for the market to pause, and consolidate. And I think that's really what it's doing more than anything now," he told AFP.

But "whether it lasts, you know, two more days or two more weeks, or how far it goes, I have no idea."

Equities opened on a positive note after government data showed inflation ebbed last month, lessening the odds of an abrupt tightening of US monetary policy.

The consumer price index rose just 0.3 per cent last month compared with July, below analyst forecasts and supporting the Federal Reserve's argument that much of the recent inflation spike is due to temporary factors that will fade.

The report had been closely watched for its implications on when the Fed will taper its massive bond purchases.

Apple shares slipped 1 per cent after the tech giant unveiled its iPhone 13 and newest watch.