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NEW YORK: Wall Street’s main indexes fell on Thursday, with technology stocks leading the declines after data showed consumer prices surged in February, cementing the case for an interest rate hike by the Federal Reserve later this month.

The Labor Department’s report showed consumer prices shot up 7.9% year-on-year, the sharpest annual spike in 40 years.

While the numbers matched economists’ expectations, investors feared that inflation would accelerate further in the coming months as Russia’s war against Ukraine drives up the costs of oil and other commodities.

Nine of the 11 major S&P sectors declined, with technology , down 1.9%, falling the most after leading a Wall Street rally in the previous session. Chipmakers fell 2.2%.

Energy shares rose 1.2% after taking a breather on Wednesday.

“Bottom line is inflation is elevated and there’s more to come,” said Peter Cardillo, chief market economist at Spartan Capital Securities.

“I was looking for inflation to peak in the second quarter but now that depends on oil. Perhaps we won’t see any relief until the end of the year.”

Fed Chair Jerome Powell last week said he would back a quarter point rate increase when the US central bank meets next week and would be “prepared to move more aggressively” later, if inflation does not abate as fast as expected.

Traders now see a 95% probability of a 25-basis-point hike by the Fed in its March meeting.

Big banks fell, with Citigroup down 2.1%.

Goldman Sachs Group Inc said it was closing its operations in Russia, becoming the first major Wall Street bank to exit the country following Moscow’s invasion of Ukraine.

Meanwhile, talks between Russia and Ukraine yielded no progress as the war entered the third week on Thursday.

At 09:55 a.m. ET, the Dow Jones Industrial Average was down 246.12 points, or 0.74%, at 33,040.13, the S&P 500 was down 39.51 points, or 0.92%, at 4,238.37, and the Nasdaq Composite was down 190.70 points, or 1.44%, at 13,064.84.

Megacap growth stocks Microsoft Corp, Meta Platforms and Tesla Inc all slipped more than 1%, while Nvidia Corp and Apple Inc dropped over 2.5% each. Shares of Amazon.com Inc jumped 4.8% after its board approved a 20-for-1 split of the e-commerce giant’s common stock and authorized a $10 billion buyback plan.

Declining issues outnumbered advancers 2.71-to-1 on the NYSE and 3.10-to-1 on the Nasdaq.

The S&P index recorded one new 52-week high and four new lows, while the Nasdaq recorded 14 new highs and 79 new lows.

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