The S&P 500 closed down 1.1% on Wednesday, dragged lower by chipmakers after a bearish brokerage report by Citi Research on Intel CorpA spike in Brent crude prices above an eye-watering $123 a barrel has made investors anxious ahead of the U.S. consumer price index report on Friday.
Market participants fear a hot reading on inflation could keep the U.S. Federal Reserve on its path to raise interest rates aggressively against the backdrop of a volatile stock market, strong consumer spending and tight labor market. On Wednesday, International Monetary Fund First Deputy Managing Director Gita Gopinath said U.S. inflation could remain above the Fed's 2% target for a long time based on current projections, and overall, the risks are towards the possibility that this will require much more steeper increases in rates.