SP500 Plunges to 2-Yr Lows After Hot US Inflation

Hot US inflation

Inflation in the US, as determined by the Consumer Price Index (CPI), decreased to 8.2% on an annual basis in September from 8.3% in August, according to a report released on Thursday by the US Bureau of Labor Statistics. This result was greater than the 8.1% market estimate.

On a monthly and annual basis, the Core CPI—which excludes volatile energy and food prices—rose 0.6% and 6.6%, respectively. Both of these numbers were higher than experts had predicted.

The S&P 500 had a 4.3% decline when the August CPI reading was released (back in September), marking the worst day of the year. If September’s figure is higher than August’s 8.3%, JPMorgan analysts cautioned in a note on Thursday, the S&P 500 may decline by as much as 5%.

Bear market confirmed

As the index dropped to new cycle lows, the bear market has been confirmed. As long as SP500 trades below previous lows at 3,575 USD, the immediate trend seems bearish.

The next support is seen at 3,500 USD, and if broken, the price might continue lower toward the 3,300 threshold.