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The Fortescue Metals Group Limited (ASX: FMG) The stock price is one of many ASX stocks being sold today. It is currently down more than 3%. Why?

Well, for starters, it was a bad day in foreign stock markets. Volatility is accelerating.

The NASDAQ-100 (NASDAQ: NDX) fell 5.5% and the S&P 500 Index (SP: .INX) fell 4.3%.

ASX stocks often follow what happened in the US stock market if there was a major positive or negative movement.

Why has the US equity market seen its biggest drop since June 2020? This happened because US inflation in August rose 8.3% year over year, 0.1% more than in July. According to the report of CNBC, economists polled by Dow Jones had expected a monthly decline of 0.1%. In other words, inflation is stronger than ever.

This happened despite falling fuel prices in August. CNBC reported that core CPI inflation, which removes food and energy costs, rose 0.6% month over month from July.

Reduced iron ore price forecast

One of the key elements of Fortescue’s profit-generating efforts is the price of iron ore. The higher the price of iron ore, the greater the revenue and net profit after tax (NPAT) Fortescue can make from the same iron ore shipments. It may also impact Fortescue’s share price.

However, according to information provided by the Australian Financial ReviewFitch Solutions has lowered its near-term iron ore price forecast due to the economic situation.

Fitch forecasts the average iron ore price for 2022 to be US$115 per tonne, down from the last forecast of US$130 per tonne.

Iron ore prices traded between US$95 per tonne and US$105 per tonne. It was noted that stocks recovered from the low recorded in June.

He doesn’t think prices will go down or up much from here. Fitch said:

Miners are already starting to react to recent price declines as their operating costs and capital expenditures remain high.

As such, we believe prices will receive some support from supply constraints through Q4 and into 2023 as higher cost miners have in several cases reduced production in response to the current price levels.

Fitch suggested that the recovery in inventories and a slowing global economy indicate that there may be limited upside in the price of iron ore. Buyers could take advantage of lower prices and build up more inventories.

Fitch Solutions has forecast iron ore prices to average $100 per ton in 2023, $90 per ton in 2024 and $80 per ton in 2025.

This could have a direct future impact on Fortescue’s share price due to its impact on earnings and cash flow.

Fortescue Stock Price Overview

Over the past month, Fortescue shares have fallen 8%.