US Stocks Fall Sharply as Inflation Data Surprises Investors
New York, CNN – US stocks took a hit on Wednesday morning as inflation data for March came in higher than expected, causing concern among investors. The hotter-than-expected report showed a 3.5% increase in consumer prices for the 12 months ending in March, marking the highest annual gain in the past six months.
The Dow was down by 503 points, or 1.3%, while the S&P 500 and Nasdaq Composite both lost 1.1%. The surge in prices was driven by increases in gas and shelter costs, with prices rising in nearly every major category.
Investors are worried that the unexpected inflation report will push back the Federal Reserve’s timeline for the rate cuts it has been hinting at for this year. The 10-year Treasury yield surged to 4.5% after the release of the March inflation data, causing further concern among investors.
Shares of bank stocks, including Bank of America, Wells Fargo, and JPMorgan Chase, all fell on Wednesday. Tech stocks, such as Microsoft, Amazon, and Apple, also experienced losses.
Despite the market drop, some experts believe investors may be overreacting. EY chief economist Gregory Daco pointed out that there are still two more CPI reports and two Personal Consumption Expenditures reports to be released before the Fed’s June policy meeting.
President Joe Biden acknowledged the need to keep costs down, stating that there is “more to do” to lower prices for hardworking families. Investors are now eagerly awaiting the Fed’s March meeting minutes for further insights into the central bank’s stance on rate cuts this year.
This is a developing story and will be updated as more information becomes available.
