North American markets fell on Tuesday after the latest U.S. inflation measure disappointed traders, with Canada’s main stock index down more than 300 points and all three major U.S. stock indexes having their worst day from June 2020.
The S&P/TSX composite was down 341.83 points at 19,645.40.
In New York, the Dow Jones Industrial Average fell 1,276.37 points to 31,104.97.  The S&P 500 fell 177.72 points to 3,932.69, while the Nasdaq composite shed 632.84 points to 11,633.57.
The sell-off ended a four-day winning streak for the major US stock indexes.
Bond prices also fell sharply, sending yields higher after the latest US consumer price index report showed inflation slowed to just 8.3% in August, instead of the 8.1% economists had expected.
As a result, chances are increasing that the Federal Reserve will raise its key interest rate next week by a full percentage point, but three-quarters of a percentage point remains the most likely outcome, CIBC Executive Director of Institutional said Equity Research Sid.  Mokhtari said.
But if the central bank hikes a full percentage point next week, markets could turn bullish.
“It’s a big surprise, to be fair to you. And I think that’s where we go right back to the (market) lows we had in the summer,” he said.
“If there is a shock to the market on the downside from this magnitude of a rate hike, it would likely be from the larger group of stocks that didn’t correct the same way the rest of the market did in And those were the biggest cap tech names in the U.S. who owned the S&P 500.”
However, this could prove to be the next best buying opportunity, according to Mokhtari.
Mokhtari expects markets to be range-bound going forward. 
“It’s very important to approach this with a barbell strategy, with utilities on one side of the ledger, and then look for risk-reward opportunities in higher growth areas or areas that may emerge, assuming there is a low building in the market, which I believe may start to develop as we move into September,” he said.
He noted that September is historically the weakest month for stock returns.
Another looming challenge for stocks ahead of the Federal Reserve’s decision day will be what is known in the financial world as Quadruple Witching Day, which will occur on Friday, September 16.  On this day, stock index derivatives, stock index options, stock options, and individual stock futures will expire simultaneously.
The October crude contract was down 47 cents at US$87.31 a barrel and the October natural gas contract was up three and a half cents at US$8.28 per mmBTU.
December gold fell US$23.20 to $1,717.40 an ounce and December copper fell five and a half cents to $3.56 a pound.
The Canadian dollar traded at 76.28 US cents versus 77.04 US cents on Monday.
This report by The Canadian Press was first published on September 13, 2022.
— With files from The Associated Press