Annual inflation surged to 3.8%, the highest since May 2023, dimming prospects for near-term Federal Reserve rate cuts.
U.S. inflation accelerated to 3.8% annually in April, the steepest rise since May 2023, while core inflation climbed to 2.8%. The data reinforced expectations that the Federal Reserve will maintain higher interest rates for an extended period, weighing on equities.
Technology stocks led losses, with the Nasdaq dropping 0.71% to 26,011, while the Russell 2000 fell 0.93% to 2,844. The S&P 500 declined 0.16% to 7,400, and only the Dow Jones Industrial Average posted modest gains.
Futures traded mixed Wednesday, reflecting uncertainty over geopolitical tensions and persistent inflation pressures despite strong first-quarter earnings.