Wednesday’s early trade: Top indexes fall on strong inflation data

NEW YORK: Wall Street’s major indexes fell on Wednesday after stronger-than-expected inflation data stoked worries of tighter monetary policy to combat what many investors fear could be a prolonged period of inflation.

The Labour Department’s data showed US consumer prices increased by the most in nearly 12 years in April.

US money markets moved fully to price in a 25 basis point interest rate hike by December 2022 after the data, while yield on 10-year Treasury notes jumped to a two-week high of 1.690%.

Among mega-caps, Facebook Inc, Amazon.com Inc, Apple, Google-parent Alphabet Inc and Microsoft Corp fell between 1.8% and 3.3% as prospects of higher rates dampened demand for the high valuation stocks.

The tech-heavy Russell 1000 growth index shed 2.2%, widely underperforming the value counterpart’s 0.9% drop, which is more geared towards economically-sensitive financials and energy stocks.

At 11:55 a.m. ET, the Dow Jones Industrial Average was down 405.84 points, or 1.18%, at 33,863.32, the S&P 500 was down 61.25 points, or 1.48%, at 4,090.85. The Nasdaq Composite was down 300.63 points, or 2.25%, at 13,088.79.