Dow Jones drops 600 points as unsettling PPI data ignites market panic

crypthub

about 10 hours ago

Dow Jones Plunge Triggered by Inflation Surprise

The Dow Jones Industrial Average fell 601.45 points (1.73%) to 34,102.87, its worst single-day drop in months. This followed a surprise 0.6% monthly rise in the Producer Price Index (PPI), doubling forecasts. Core PPI also climbed 0.4%, raising inflation fears. The S&P 500 and Nasdaq fell 1.5% and 1.8% respectively, while the 10-year Treasury yield jumped 12 basis points to 4.35%.

Key PPI Data and Sector Impacts

February PPI data showed services inflation at 0.4% and goods prices up 0.8%, driven by energy and food costs. Financial stocks like Goldman Sachs and JPMorgan Chase dropped over 3%, while industrials like Caterpillar fell 2.9%. Defensive sectors, including Johnson & Johnson and Walmart, declined less sharply. Trading volume surged 45% above the 30-day average, signaling panic.

Federal Reserve Policy and Global Reactions

The PPI report increases pressure on the Federal Reserve to consider further rate hikes, with the CME FedWatch Tool showing a 65% chance of a June hike. Global markets mirrored the U.S. drop, with European and Asian indices falling, and the dollar index rising 0.8%. Experts warn the Fed cannot declare victory yet due to persistent services inflation. Investors are shifting to inflation-protected assets and short-term bonds amid uncertainty.