WALL ST BATTERED AS HOT INFLATION DATA STYMIES RATE-CUT HOPES
The heightened inflation reading reported on Wednesday caused a significant downturn in Wall Street's major stock indexes as investors shifted to a more risk-averse stance. The stronger-than-expected increase in U.S. consumer prices during March, driven by higher costs for gasoline and rental housing, dashed hopes of an imminent start to the Federal Reserve's monetary easing cycle in June.
The Consumer Price Index (CPI) rose by 0.4% on a monthly basis in March, exceeding expectations. On an annual basis, the CPI showed a 3.5% increase, slightly higher than the estimated growth rate of 3.4%. Furthermore, when excluding the volatile food and energy components, the core CPI figure also experienced a 0.4% month-on-month rise in March. Annually, the core CPI increased by 3.8%, surpassing the estimated growth rate of 3.7%. These higher-than-anticipated inflation figures led financial markets to speculate that the Federal Reserve would likely postpone any interest rate cuts until September, dampening investor sentiment and prompting a downturn in stock indexes.
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