Investing.com – U.S. stock index futures fell sharply on Wednesday after consumer prices rose more than expected in March, raising the possibility that the Federal Reserve will further delay an interest rate cut later this year .
As of 9 a.m. ET (1 p.m. GMT), it fell 440 points, or 1.1%, slumped 69 points, or 1.3%, and fell 270 points, or 1.5%.
Strong consumer price index data will provide further insights into interest rate cuts
Data released late Wednesday showed the annualized reading of the closely watched figure rose 3.5% last month, a sharp jump from the 3.2% recorded in February and more than the 3.4% expected. The year-over-year figure, which excludes volatile items such as food and fuel, remained elevated at 3.8%, well above the Fed’s medium-term target of 2%.
Fed officials have made easing inflation the main goal of a series of interest rate hikes that have pushed borrowing costs to their highest levels in more than two decades.
At their last meeting in March they predicted the central bank would accept cuts of 75 basis points this year, but stressed that they first need to see more evidence that price growth is slowing sustainably until their annualized target of 2%. .
This inflation reading provides little impetus for the Fed to start cutting short-term interest rates, especially after Friday’s blistering jobs report.
Several Fed officials have warned in recent weeks that sticky inflation gives the central bank more room to keep rates higher for longer.
Yields on rate-sensitive 2-year Treasury notes and benchmark 10-year notes, which typically move inversely to prices, rose Wednesday.
The Fed’s March meeting is scheduled for Wednesday and is expected to offer more information on the bank’s plans to cut interest rates this year.
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Market favorite NVIDIA Corporation (NASDAQ:) fell 1.5% to a one-month low as waning hype over artificial intelligence saw traders lock in profits after a stellar run in the stock.
Wall Street Banks JPMorgan Chase & Co (NYSE:), Citigroup Inc (NYSE:) e Wells Fargo & Company (NYSE:) will kick off earnings season on Friday.
(Ambar Warrick and Noreen Burke contributed reporting)