By Shashwat Chauhan and Shristi Achar A
(Reuters) – Wall Street's major stock indexes on Wednesday dented hopes that the U.S. Federal Reserve would begin a monetary easing cycle in June after announcing higher-than-expected inflation. fell.
The Consumer Price Index (CPI) rose 0.4% on a monthly basis in March, according to a Labor Department report, compared with the 0.3% rise expected by economists polled by Reuters. For the year, he increased by 3.5% against an estimated growth rate of 3.4%.
The core figure, which excludes volatile food and energy components, rose 0.4% month-on-month in March, against expectations for a 0.3% rise. The increase was 3.8% for the year, compared to an estimated 3.7% increase.
“The data was higher than expected on both the top line and core numbers, reflecting the persistence of inflation and the possibility that the Fed will cut rates less frequently or not at all in 2024,” said senior portfolio manager Robert Pavlik. It shows potential.” At Dakota Wells.
“I don't think this speaks to the need for rate hikes, but we do need to reprice stocks for the different environment that this inflation indicator suggests.”
After the data was released, the yield on all government bonds rose sharply, with the 10-year bond rising to 4.4806%, the highest level since November last year.
Traders have stopped believing the Fed will cut rates in June after the CPI report, and are now predicting the Fed will wait until September to cut rates.
Minutes from the March meeting, where the Fed stuck to its guidance for three rate cuts this year, are scheduled to be released the same day and could be key to gauging the Fed's stance on policy easing.
Atlanta Fed President Rafael Bostic said in an interview with Yahoo Finance on Tuesday that the Fed may not cut interest rates this year if inflation stalls and the economy continues to outperform.
The first-quarter earnings season will pick up pace heading into the weekend, when banking giants JPMorgan Chase & Co., Citigroup Inc. and Wells Fargo & Co. are scheduled to make announcements.
As of 9:38 a.m. ET, the Dow Jones Industrial Average was down 520.39 points, or 1.34%, at 38,363.28, the S&P 500 was down 61.30 points, or 1.18%, at 5,148.61, and the Nasdaq Composite Index was down 177.10 points, or 1.09 points. It became. %, 16,129.54.
All 11 sectors of the S&P 500 were in the red. Real estate, which is sensitive to interest rates, led the decline, dropping 3.3%.
Among individual stocks, Delta Air Lines rose 3.9% after the company offered a positive outlook for the quarter, posting first-quarter profits that beat Wall Street expectations on strong travel demand.
Alibaba's U.S.-listed shares rose 2.8% on Tuesday after Alibaba co-founder Jack Ma wrote a lengthy memo to employees expressing support for the internet giant's turnaround efforts. This was an unusual move for the billionaire, who has been away for several years. From the spotlight.
Declining issues outnumbered advancing issues by a ratio of 13.86 to 1 on the New York Stock Exchange and 5.76 to 1 on the Nasdaq.
The S&P Index had no new 52-week highs and six new lows, while the Nasdaq had 11 new highs and 75 new lows.
(Reporting by Shashwat Chauhan and Shristi Achar A in Bengaluru; Additional reporting by Ankika Biswas; Editing by Pooja Desai)