Wall Street ends sharply lower as sticky inflation dims rate cut hopes

U.S. stocks tumbled to a lower close on Wednesday after hotter-than-expected inflation data threw cold water on hopes that the Federal Reserve would begin cutting interest rates as early as June.

All three major U.S. stock indexes veered sharply lower at the opening bell after the Labor Department’s Consumer Price Index (CPI) report landed north of consensus, a reminder that inflation’s road back down to the Fed’s 2% target will remain a long and meandering one.

“The stickiness of inflation data caused a ‘sell first ask questions later’ mentality,” said Ryan Detrick, chief market strategist at Carson Group in Omaha. “And that disappointment caused a push-back on not only the potential timing of the first rate cut but how many we’re going to get.”

Minutes from the Fed’s March policy meeting reflected concerns that inflation’s progress toward that target might have stalled, and restrictive monetary policy may need to be maintained for longer than anticipated.


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