Wall Street moved lower on Tuesday despite some record highs during the trading session. The Standard and Poor’s 500 Index declined 13.77 points, or 0.68%, to trade at 2,003.69. The Dow Jones Industrial Average fell 49.97 points, or 0.29%, to trade at 17,081.89 and the Nasdaq Composite tumbled 42.03 points, or 0.87%, to trade at 4,796.61. The Federal Reserve’s recent shift away from raising interest rates has analysts wondering if a rate hike should be expected this year. While lower interest rates are usually a boon for stocks, the Federal Reserve’s hesitation to raise interest rates for the first time in a decade has investors concerned. The Fed has most recently cited worries over a global economic slowdown that could possibly impact the U.S. economy in a negative way. In other words, the Fed isn’t sure that the U.S. economy is strong enough to withstand tighter monetary control at this time. 2015 holds two more opportunities for the central bank to further communicate their position on raising interest rates: late this month and mid December.
Stock markets in Asia stumbled on Wednesday, as they extended the previous session’s losses after a new report has revealed that China’s inflation has grown at a slower pace than previously expected. The second-largest economy in the world’s latest consumer price index has come in at 1.6% growth for September, well below August’s 2% growth or the expected 1.8% growth for September. Investors are expecting more stimulus programs from Beijing. In the meantime, Singapore monetary authorities have eased policies for the second time this year as they slow down the Singapore dollar's rate of appreciation in an effort to reinvigorate an economy that has flirted with recession during the third quarter. Chinese shares also suffered declines, as the blue-chip CSI300 index and the Shanghai Composite Index were both down around 0.6%. MSCI's broadest index of Asia-Pacific shares outside Japan declined 0.8% and the Japanese Nikkei index tumbled 1.8%. Australian shares have also declined after the release of China’s lukewarm inflationary data, as the S&P/ASX 200 index declined 0.5%.
In commodities, crude oil prices have settled, although they remain under pressure after the International Energy Agency (IEA) has revisited its concerns over an oversupplied market despite drastic declines in oil production from key non-OPEC oil exporters. U.S. crude added around 0.1% to trade at $46.9 a barrel after a nearly 1% overnight decline. Brent oil remained nearly flat at $49.25 after heavier declines in the previous session. Commodities were also under pressure by a weaker dollar. The dollar index, pitting the greenback against six of its major peers, has moved about 0.1% lower to 94.662 early on Wednesday after touching a one-month low on Tuesday.
Today’s economic data releases include UK unemployment and U.S. retail sales. U.S. core inflation rate will be released tomorrow.