Why the stock market fell on Friday – Footwear News
Stocks took a hit on Friday after a much-anticipated inflation report showed prices rising faster than expected in May.
Consumer prices rose 8.6% in May from a year ago, according to the monthly report from the Bureau of Labor Statistics. The number was up from 8.3% growth in April and 8.5% growth in March and represented the largest 12-month increase since the period ending in December 1981.
This new data fueled investor concerns, which led to a selloff on Friday.
According to this report, the Dow Jones Industrial Average lost nearly 800 points, or 2.5% on Friday. The S&P 500 fell 110 points, or 2.75%, while the Nasdaq Composite fell 420 points, or 3.6%.
Footwear stocks were also hit across the board. On Friday afternoon, Crocs was down 5.37%, Caleres 5.1%, Adidas 3.3%, Nike and Steve Madden 3%, Skechers 3.3% and Designer Brands Inc. 3%. .38%.
Retailers also felt the heat on Friday. Foot Locker stock fell almost 4% on Friday afternoon. Academy Sports was down 3.12%, Shoe Carnival was down 3.1%, Target was down 2.36%, Kohl’s was down 1.7% and even Amazon saw a decline of 5.47%.
In response to today’s inflation report, industry leaders called on the Biden administration to take action to mitigate inflation by repealing tariffs on goods from China.
“This report showing that runaway inflation is continuing is all the more reason for the administration to act quickly to repeal the tariffs,” said Matthew Shay, president and CEO of the National Retail Federation. “As the Federal Reserve pursues its long-term strategy to stem inflation, we need action from the administration and Congress to lower prices that can be taken immediately. The repeal of tariffs is the one of these steps and one of the most effective and meaningful.
The Federal Reserve is expected to announce a half-percent interest rate hike next week, but it could decide to go higher based on this news.
“We believe the US central bank now has good reason to surprise markets by increasing more aggressively than expected in June,” Barclays analysts wrote in a research note on Friday. “We realize it’s a close call and it could play out in June or July. But we are changing our forecast to call for a 75 basis point hike on June 15th. »