Dow plummets more than 500 points on heels of hot inflation data

Published

1 year ago

February 22, 2024

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The Dow Jones Industrial Average plunged more than 500 points on Tuesday after hot inflation data for January dimmed hopes that the Federal Reserve would begin cutting interest rates next month.

The Dow, which tumbled as 750 points, slid 1.4% — its worst day since since March 2023. The S&P 500 slipped 1.4%, while the tech-heavy Nasdaq Composite fell 1.8%.

Both the Dow and the S&P 500 had hit record highs this year before plunging following the release of the Consumer Price Index, which rose a stiffer-than-expected 3.1% on an annual basis.

The figure — which tracks changes in the costs of everyday goods and services — remains far off from the Fed’s 2% target.

Core CPI a number that excludes volatile food and energy prices increased 0.4% in January, to 3.9%.

The figure, a closely-watched gauge among policymakers for long-term trends, was also higher than what economists anticipated.

“Inflation staying sticky is everyone’s biggest fear and this report is showing its not going down,” Chris Zaccarelli, the chief investment officer of Independent Advisor Alliance, said. “The knee- jerk reaction is for stocks and bonds to sell off. That makes sense. Then we’ll wait for the next report and if that’s lower this will turn out to be just a blip.”

The increase could delay the prospect of three interest rate cuts the Fed anticipates to make in 2024.

Wall Street had initially expected that the first time rates were brought down from their current 22-year high would be in March.

Fed Chair Jerome Powell said after the latest policy meeting that “it’s not likely that this committee will reach that level of confidence in time for the March meeting.”

The CME FedWatch Tool shows that a May rate is also largely off the table.

The probability of a May rate cut slumped from 52.2% to 36.6% on Monday while the chance of a slash in June now stands at 78.6%, down from 92.2%.

Atlanta Fed President Raphael Bostic, who is voting on the Federal Open Market Committees policy decisions this year, told CNN that he’s anticipating the first of three cuts to take place in the fourth quarter — weeks after the mid-year slowdown Wall Street is now expecting.

By the end of the year, inflation will be near “the lower twos,” he said.

This isnt a TikTok video or something like that where you get trends happening so fast. It takes a while for the decisions of individual decisions and millions of people to come together and to start to create trends, he told CNN.

At the same time, theres a significant risk if the Fed leaves interest rates where they currently are for too long, Bostic warned.

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He also noted how difficult it’s been to tamp down inflation as the job market has remained surprisingly strong.

Januarys monthly jobs report added a blockbuster 353,000 new jobs to the economy — nearly double analysts’ expectations.

Although inflation appears to be slowing, the economy remains Americans overall top concern, cited by 22% of poll respondents, as they have struggled with inflation and other aftershocks of the COVID-19 pandemic, according to a Reuters/Ipsos poll released last month.

Since taking office, Biden has made a pitch for lower supermarket prices, pushed drug makers to lower insulin costs, hotel chains to reduce fees and tried to diversify the meat-packing industry after beef prices skyrocketed in the aftermath of the pandemic.

Alfredo Ortiz, president and CEO of Job Creators Network, told The Post in a statement that “inflation remains historically high and is nothing to cheer about.”

“Talk to any American going to the grocery store, hardware store or pharmacy, and they’ll tell you prices continue to rise at a painful rate.”

A December 2023 report on shrinkflation — when businesses cut product sizes but keep prices the same — found that household paper products were 34.9% more expensive per unit than they were in January 2019, with about 10.3% of the increase due to producers shrinking the sizes of rolls and packages.

Researchers also found that the price of snacks like Oreos and Doritos had gone up 26.4% over the same period, with shrinking portions accounting for 9.8% percent of the increase.

US

Donald Trump sending ‘top of the line’ weapons to support NATO in Ukraine war

Published

2 hours ago

July 15, 2025

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Donald Trump sending 'top of the line' weapons to support NATO in Ukraine war

Donald Trump has agreed to send “top of the line weapons” to NATO to support Ukraine – and threatened Russia with “severe” tariffs if it doesn’t agree to end the war.

Speaking with NATO secretary-general Mark Rutte during a meeting at the White House, the US president said: “We’ve made a deal today where we are going to be sending them weapons, and they’re going to be paying for them.

“This is billions of dollars worth of military equipment which is going to be purchased from the United States, going to NATO, and that’s going to be quickly distributed to the battlefield.”

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Weapons being sent include surface-to-air Patriot missile systems and batteries, which Ukraine has asked for to defend itself from Russian air strikes.

Mr Trump also said he was “very unhappy” with Russia, and threatened “severe tariffs” of “about 100%” if there isn’t a deal to end the war in Ukraine within 50 days.

The White House added that the US would put “secondary sanctions” on countries that buy oil from Russia if an agreement was not reached.

Later on Monday, Ukrainian leader Volodymyr Zelenskyy thanked Mr Trump and said he was “grateful” for the US president’s “readiness to help protect our people’s lives”.

After criticising Vladimir Putin’s “desire to drag it out”, he said he appreciated “preparing a new decision on Patriots for Ukraine” – and added Kyiv is “working on major defence agreements with America”.

It comes after weeks of frustration from Mr Trump over Mr Putin’s refusal to agree to an end to the conflict, with the Russian leader telling the US president he would “not back down” from Moscow’s goals in Ukraine at the start of the month.

During the briefing on Monday, Mr Trump said he had held calls with Mr Putin where he would think “that was a nice phone call”, but then “missiles are launched into Kyiv or some other city, and that happens three or four times”.

“I don’t want to say he’s an assassin, but he’s a tough guy,” he added.

Earlier this year, Mr Trump told Mr Zelenskyy “you’re gambling with World War Three” in a fiery White House meeting, and suggested Ukraine started the war against Russia as he sought to negotiate an end to the conflict.

After Mr Trump’s briefing, Russian senator Konstantin Kosachev said on Telegram: “If this is all that Trump had in mind to say about Ukraine today, then all the steam has gone out.”

Meanwhile, Mr Zelenskyy met with US special envoy Keith Kellogg in Kyiv, where they “discussed the path to peace” by “strengthening Ukraine’s air defence, joint production, and procurement of defence weapons in collaboration with Europe”.

He thanked both the envoy for the visit and Mr Trump “for the important signals of support and the positive decisions for both our countries”.

US

Trump is clearly fed up with Putin – but will his shift in tone force Russia to the negotiating table?

Published

2 hours ago

July 15, 2025

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Trump is clearly fed up with Putin - but will his shift in tone force Russia to the negotiating table?

As ever, there is confusion and key questions are left unanswered, but Donald Trump’s announcement on Ukraine and Russia today remains hugely significant.

His shift in tone and policy on Ukraine is stark. And his shift in tone (and perhaps policy) on Russia is huge.

Ever since Mr Trump returned to the White House he has flatly refused to side with Ukraine over the Russian invasion.

He has variously blamed Ukraine for the invasion and blamed Joe Biden for the invasion, but has never been willing to accept that Russia is the aggressor and that Ukraine has a legitimate right to defend itself.

Today, all that changed. In a clear signal that he is fed up with Vladimir Putin and now fully recognises the need to help Ukraine defend itself, he announced the US will dramatically increase weapons supplies to Kyiv.

But, in keeping with his transactional nature and in a reflection of the need to keep his isolationist “America-First” base on side, he has framed this policy shift as a multi-billion dollar “deal” in which America gains financially.

American weapons are to be “sold” to NATO partners in Europe who will then either transfer them to Ukraine or use them to bolster their own stockpiles as they transfer their own existing stocks to Kyiv.

“We’ve made a deal today,” the president said in the Oval Office. “We are going to be sending them weapons, and they are paying for them. We are manufacturing, they are going to be paying for it. Our meeting last month was very successful… these are wealthy nations.”

This appears to be a clever framing of the “deal”. Firstly, America has always benefited financially by supplying weapons to Ukraine because much of the investment has been in American factories, American jobs and American supply chains.

While the details are not entirely clear, the difference now appears to be that the weapons would be bought by the Europeans or by NATO as an alliance.

The Americans are the biggest contributor to NATO, and so if the alliance is buying the weapons, America too will be paying, in part, for the weapons it is selling.

However, if the weapons are being bought by individual NATO members to replenish their own stocks, then it may be the case that the US is not paying.

NATO officials referred all questions on this issue to the White House, which has not yet provided clarity to Sky News.

It is also not yet clear what type of weapons will be made available and whether it will include offensive, as well defensive, munitions.

A key element of the package will likely be Patriot missile batteries, 10 to 15 of which are believed to be currently in Europe.

Under this deal, it is understood that some of them will be added to the six or so batteries believed to be presently in Ukraine. New ones would then be purchased from US manufacturers to backfill European stocks. A similar arrangement may be used for other weapons.

The president also issued the Russian leader with an ultimatum, saying that Putin had 50 days to make a peace deal or else face 100% “secondary tariffs”. It’s thought this refers to a plan to tariff, or sanction, third countries that supply Russia with weapons and buy Russian oil.

This, the Americans hope, will force those countries to apply pressure on Russia.

But the 50-day kicking of the can down the road also gives Russia space to prevaricate. So, a few words of caution: first, the Russians are masters of prevarication. Second, Trump tends to let deadlines slip. And third, we all know Trump can flip-flop on his position repeatedly.

Maybe the most revealing aspect of all this came when a reporter asked Mr Trump: “How far are you willing to go if Putin sends more bombs in the coming days?”

“Don’t ask me questions like that…”

Mr Trump doesn’t really know what to do if Mr Putin continues to take him for a ride.

Mr Biden, before him, supplied Ukraine with the weapons to continue fighting.

If Mr Trump wants to end this, he may need to provide Ukraine with enough weapons to win.

But that would prolong, or even escalate, a war he wants to end now.

There’s the predicament.

Technology

Nvidia says U.S. government will allow it to resume H20 AI chip sales to China

Published

3 hours ago

July 15, 2025

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Nvidia says U.S. government will allow it to resume H20 AI chip sales to China

Nvidia CEO Jensen Huang attends a roundtable discussion at the Viva Technology conference dedicated to innovation and startups at Porte de Versailles exhibition center in Paris on June 11, 2025.

Sarah Meyssonnier | Reuters

Nvidia announced Tuesday that it hopes to resume sales of its H20 general processing units to clients in China, saying that the U.S. government had assured the company would be granted licenses.

Nvidia’s sales of the H20 chips, which had been designed specifically to keep them out of export controls on China, were halted in April.

“The U.S. government has assured NVIDIA that licenses will be granted, and NVIDIA hopes to start deliveries soon,” the company said in a statement.

This comes against the backdrop of a preliminary trade deal between Washington and Beijing last month that sought China to resume rare earth exports and the U.S. to relax tech export controls.

Nvidia CEO Jensen Huang in recent months has ramped up his lobbying against export controls, arguing that they inhibited American tech leadership. In May, Huang said chip restrictions had already cut Nvidia’s China market share nearly in half.

Huang also announced a new “fully compliant” GPU, NVIDIA RTX PRO, saying it was ideal for smart factories and logistics.

The potential change in U.S. stance follows a meeting between Huang and U.S. President Donald Trump last week.

In his meeting with Trump and U.S. policymakers, Huang had reaffirmed Nvidia’s support for the administration’s job creation and onshoring efforts, as well as the aim for America to lead in global AI, the company said.

Meanwhile, in Beijing, it was confirmed that Huang has met with government and industry officials to discuss the benefits of AI and ways for researchers to advance safe and secure AI for the benefit of all.