The Dow plunges more than 500 points as stubborn inflation goes the wrong way

The data left investors uncertain about whether the Federal Reserve will cut interest rates this year as hoped.

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Image for article titled The Dow plunges more than 500 points as stubborn inflation goes the wrong way
Photo: Brendan McDermid (Reuters)

The Dow Jones Industrial Average and the other major U.S. stock market indexes were bleeding Wednesday morning as March inflation data came in higher than anticipated.

The Consumer Price Index (CPI) for March showed an annual rate of inflation of 3.5%, up from 3.2% in February, primarily because of rising rents and gas prices. Economists had predicted an inflation rate of 3.4% — still down from 2022 highs but well below the Fed’s target rate of 2%.

The data left investors uncertain about whether the Federal Reserve will cut interest rates this year as hoped.

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The Dow quickly plunged 525 points, or 1.35%, to 38,359 shortly after markets opened — now far from crossing the 40,000 mark like it almost did just a few weeks ago. The S&P 500 dropped more than 1.2% and the Nasdaq fell almost 1.3%.

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Meanwhile, the 10-year Treasury yield went up 4.5% on Wednesday after the inflation report.

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