The stock finished lower yet again on Wednesday after consumer prices came in higher than expected, and although experts think inflation may have peaked, the Federal Reserve may still need to raise rates more aggressively as it will take quite some time to return to normal levels.
The Dow Jones Industrial Average gave up a small gain earlier in the day to finish down 1%, over 300 points, while the S&P 500 fell 1.6% and the tech-heavy Nasdaq Composite 3.2%.
Stocks fell after inflation came in higher than expected, with prices surging 8.3% on a yearly basis in April, according to new data released by the Labor Department.
Though consumer prices were hotter than forecast by economists, the rate of inflation in April slowed for the first time in eight months, falling from 8.5% in March: Food, shelter, airline and vehicle prices all surged, but gas prices fell roughly 6% from last month, helping offset some price gains.
What’s more, some experts now predict that inflation has likely peaked, although there remains a great deal of uncertainty about how long it will take for prices to return to normal.
Rates surged following the monthly inflation reading: The yield on the benchmark ten-year Treasury note jumped back above 3% on Wednesday, with some investors worried about higher inflation leading to a slowdown in economic growth.
Tech stocks were hard-hit, weighing on markets yet again as investors continued to offload shares: The likes of Apple, Netflix, Amazon and Tesla all fell by 3% or more.