Falling DAX Stock Market Plunges Amid US Inflation Concerns

Investors Seek Safety as Economic Outlook Dims

Key Points

• US inflation data exceeds expectations, raising concerns about the economy.
• Stock markets and major indices, including the DAX, are experiencing sharp declines.
• Investors are fleeing from long-term bonds, leading to falling prices.
• The DAX has been trending downward for weeks as economic fears persist.

The Dow Jones Industrial Average and other major US stock indices opened lower on Wednesday following the release of hotter-than-expected US inflation data, which stoked concerns about the economy's health.

The S&P 500 and Nasdaq Composite also fell in early trading, as investors sought safety amidst the uncertainty. The Dow Jones Industrial Average was down over 500 points at one point, while the S&P 500 lost over 2%.

The sell-off was triggered by data showing that the US consumer price index (CPI) rose by 9.1% in June, compared to expectations of 8.8%. This is the highest inflation rate in the United States since November 1981.

The data has raised concerns that the Federal Reserve will be forced to raise interest rates more aggressively in order to contain inflation, which could lead to a recession. Higher interest rates make it more expensive for businesses to borrow and invest, which can slow economic growth.

The DAX, a barometer of the health of the German economy, has been trending downward for weeks as fears about a possible recession have grown.