U.S. Stocks Tumble With Bonds on Fed Rates Rhetoric as Oil Rises
- CPI, home-price data spur reassessment of U.S. policy outlook
- Asian index futures foreshadow retreat after slump in S&P 500
Sterling Surges As Poll Reveals Remain Lead
U.S. stocks retreated and the Treasury yield curve flattened to the narrowest since 2007 amid growing speculation that the Federal Reserve views economic growth as being firm enough to justify raising interest rates as soon as June.
The S&P 500 Index erased Monday’s rally amid data indicating gains in consumer prices, with losses accelerating after a pair of Fed officials suggested higher rates may be warranted. Two-year Treasuries, the coupon security most sensitive to expectations around Fed policy, underperformed longer maturities, shrinking the yield advantage offered on 10-year debt. Petroleo Brasileiro SA, Brazil’s state-run oil producer, is offering record-high rates to entice investors to its first international bond sale in a year.