Traders work on the floor of the New York Stock Exchange on April 1, 2024.
Brendan McDiarmid | Reuters
Stocks fell sharply on Wednesday after higher-than-expected March inflation data could delay the Federal Reserve's interest rate cuts that investors had hoped for.
Investor sentiment further cooled following the release of March Fed board minutes that reflected officials' concerns that inflation was not moving fast enough toward the Fed's 2% target.
of Dow Jones Industrial Average It fell 422.16 points (1.09%) to 38,461.51.of S&P500 5,160.64, down 0.95%. Nasdaq Composite It fell 0.84% to close at 16,170.36.
With the exception of energy, all sectors of the broad market index were negative in trading hours. Real estate led the sector decline on the day, falling 4.1%. The S&P 500 index rose in April in anticipation of the latest inflation report after a strong start to the year, with the benchmark up more than 10% and its highest first-quarter gain in five years. was stuck.
According to a survey of economists compiled by Dow Jones, the CPI rose 0.3% month-on-month and 3.4% year-on-year in March, compared to expectations of 0.3% month-on-month and 3.5% year-on-year. Core CPI, which excludes volatile food and energy prices, rose 0.4% month-on-month and 3.8% year-on-year, compared to expectations of 0.3% and 3.7% increases, respectively. CPI for all items rose at an annual rate of 3.2% in April.
Federal funds futures trading data currently suggests there is only a 17% chance the Fed will cut rates at its June meeting, according to the CME FedWatch tool. Traders are now predicting that the first rate cut is likely to occur at the central bank's September meeting.
The yield on the 10-year U.S. Treasury, a benchmark for mortgages and other loans, soared above 4.5% on the inflation report. The yield on two-year bonds rose to nearly 5%.
Bank and industrial stocks fell. JP Morgan Chase It fell to about 0.9%, honeywell down 1.4% — on concerns that rising interest rates could begin to choke the economy.Once red-hot tech stocks microsoft and apple They also lowered prices by 0.7% and 1.1%, respectively. The small-cap benchmark Russell 2000 fell 2.5%.
“A series of reports that the Fed has exceeded expectations makes it more difficult to make the case for the Fed to cut rates in the near term,” said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance. Ta.
Wealth Alliance President and Managing Director Eric Deaton said the market had managed to shake off hot inflation data in January and February, but signs of persistently high prices added to Wednesday's economic downturn. It is said that he is applying
“This is as good a catalyst as anything. I don't think this is the end of the bull market. But I do think it's an excuse for a lot of people who made a lot of money to take away some of that profit.” Walked away from the table ” Deaton said.
