US Stock Market Declines on Higher-Than-Expected Inflation Figures

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US Stock Market,Decline,Inflation Figures

The US stock market experienced a significant decline on Wednesday due to higher-than-expected inflation figures. The S&P 500 lost 1%, and the tech-heavy Nasdaq Composite fell by 0.8%. US consumer prices rose 3.5% over the past 12 months, marking the highest annual gain in the past six months. Market participants are now expecting only 50 basis points of easing for the remainder of 2024.

On Wednesday, the US stock market experienced a significant decline due to higher-than-expected inflation figures. The S&P 500 lost 1%, and the tech-heavy Nasdaq Composite fell by 0.8%. According to the latest data released Wednesday by the Bureau of Labor Statistics, US consumer prices rose 3.5% over the past 12 months, with an increase in the previous month. That's up monumentally from February's 3.2% rate and marks the highest annual gain in the past six months.

And while gas and shelter costs contributed more than half of that monthly increase, prices rose in almost every major category last month, the BLS said. Indeed, it's time for risk markets to face a reality check as the rates markets undergo harsh repricing and hopes for a June rate cut from the Fed have been dashed. A rate cut in June was likely unrealistic from the outset. The US economy has been showing significant underlying strength, leaving little room for further slowdown in price expansion within the services sector. Now that the data has thoroughly shattered policymakers' dovish hopes, market participants are viewing the situation through a much less dovish lens, expecting only 50 basis points of easing for the remainder of 2024. And perhaps even that is a stretch as Fed board members may consider this outlook optimistic in light of the unexpectedly hotter price pressure. The front end took a beating on Wednesda

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