U.S. stock futures were slightly higher. “Equity futures suggest the disaster stops here,” Robert Carnell, regional head of Asia-Pacific research at ING, wrote in a report on Wednesday. U.S. stocks fell on Tuesday, posting their worst day since June 11, 2020, after August inflation data surprised investors. The U.S. Consumer Price Index, which covers basic goods and services, rose 0.1 percent from July, beating economists’ expectations for a 0.1 percent drop. Annual inflation eased for a second straight month, but also remained persistently high, with prices rising 8.3% year-on-year. The Dow ( INDU ) fell 3.9%. The S&P 500 (INX) fell 4.3%, while the Nasdaq Composite (COMP) fell 5.2%. Investors worried that higher-than-expected inflation could prompt the Federal Reserve to raise interest rates more aggressively, severely damaging the country’s economy in the process. The lackluster U.S. inflation data also caught markets in Asia “completely off guard,” Carnell wrote, noting that core U.S. inflation – which strips out more volatile categories such as food and natural gas – had reached 6 .3% in August. The 0.6% monthly gain was double what economists had expected. Japan’s Nikkei 225 fell 2.8 percent on Wednesday, while South Korea’s Kospi lost 1.6 percent. Chinese markets also fell, with the benchmark Shanghai Composite (SHCOMP) down 0.8%. Hong Kong’s Hang Seng (HSI) fell 2.5%. Consumers in the world’s largest economy are struggling to adjust to rising prices, with cuts on almost everything from food to school supplies. The UK’s annual inflation rate also eased in August to 9.9% thanks to falling petrol prices, but was up 0.5% on the previous month. And stripping out energy and food costs, the UK’s annual CPI rose by up to 6.3%. — Nicole Goodkind, Alicia Wallace and Laura He contributed to this report.
