With inflation going only higher, stocks fell on Wall Street Thursday as expectations build that the Federal Reserve will have to get more aggressive about removing the tremendous support it’s given the economy.
The hottest inflation reading since 1982 sent the S&P 500 down 1.7% in afternoon trading. It also sent Treasury yields jumping, as traders built up bets the Fed may have to apply the brakes to the economy with a bigger-than-usual hike in interest rates next month. The yield on the 10-year Treasury topped 2% for the first time since August 2019, according to Tradeweb.
Stock prices swung immediately after the report, which was even hotter than economists expected. At the start of trading, sharp slumps for tech stocks sent the S&P 500 down, following the usual playbook when expectations build for rising rates. Stocks then pared losses only to slip again.
