The S&P 500 index closed down on Tuesday. Analysts said that although the US Consumer Price Index (CPI) rose less than expected, it may not change the Fed's cut-down schedule. The index closed down 0.6%, the sixth decline in seven days. The 11 major industry sectors fell across the board, led by the energy and financial sectors. The technology-heavy Nasdaq 100 Index fell 0.3%, and the Dow Jones Industrial Average fell 0.8%.

The US CPI rose less than expected in August, indicating that upward pressure on inflation has begun to weaken somewhat. The U.S. stock market initially responded positively to the data, but it quickly gave up gains. City Index senior financial market analyst Fiona Cincotta said this was because of increasing uncertainty, including possible increases in corporate taxes and slower economic growth. And the increase in new crown cases, in addition, inflation has not slowed down enough to allow the Fed to change direction. The code reduction is still imminent, although the start date has not yet been determined. Blake Gwinn, a strategist at RBC Capital Markets, also believes that the CPI data will not cause the Fed to postpone the reduction, and it is still expected that the Fed will announce its start to reduce debt purchases at a meeting in November or December.

The August CPI did support the Fed’s temporary inflation rate because the data showed that pressure in some areas where prices rose the most two months ago has eased, including air tickets, accommodation, and second-hand car and truck prices. Adam Phillips, managing director of portfolio strategy at EP Wealth Advisors, said that today’s stock market decline is just a continuation of last week’s weakness. Although the August CPI report almost confirmed that the Federal Reserve meeting next week will not announce a reduction in the market, the current obvious danger lies in the economic slowdown. 

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