New Telegraph-Admin 
US stocks stumbled on Wednesday after a key inflation report showed an unexpected uptick in consumer prices last month. The Dow Jones Industrial Average (^DJI) fell about 1.1 per cent, or almost 425 points. The S&P 500 (^GSPC) dropped nearly 1 percent, and the tech-heavy Nasdaq Composite (^IXIC) lost almost 0.9 prr cent. Meanwhile, bond yields soared. The 10- year Treasury yield (^TNX) gained as much as 20 basis points on Wednesday afternoon, hitting nearly 4.57 per cent, its highest level since November.
The moves came after government data showed the Consumer Price Index (CPI) rose 0.4 per cent over the previous month and 3.5 per cent over the prior year in March, an unexpected acceleration from February’s 3.2 per cent annual gain in prices. Both measures came in ahead of economist forecasts of a 0.3 per cent month-over-month increase and a 3.4 per cent annual increase, according to a survey by Bloomberg. The hotter-than expected print could prompt investors to expect fewer rate cuts from the Fed this year. Indeed, according to the CME FedWatch tool, around 80 per cent of bets are now on the Fed holding steady at current rate levels in June.
More than half of investors also expect the central bank to leave the rate unchanged through its July meeting, leaving September as the most likely spot for an initial cut from the US central bank. Also out Wednesday, the latest minutes from the Federal Reserve’s latest policy meeting showed “almost all” officials believed it would be appropriate to lower interest rates “at some point.”
Read more: What the Fed rate decision means for bank accounts, CDs, loans, and credit cards. Meanwhile, crude oil futures erased earlier losses in afternoon trading following a report that the US and its allies believe a strike by Iran or its proxies against Israeli targets is imminent. West Texas Intermediate (CL=F) rose more than one per cent back above $86 per barrel, while Brent (BZ=F) futures jumped to hover above $90 per barrel.
