Wall Street Caught Off Guard by ‘Sticky’ CPI Signs: Markets Wrap
- US CPI tops estimates across the board as inflation persists
- Traders pull back bets on Fed interest-rate cuts before July
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Wall Street got a reality check on Tuesday, with hotter-than-estimated inflation data triggering a slide in both stocks and bonds.
Equities pushed away from their all-time highs as the consumer price index topped estimates across the board. Treasuries sold off, with two-year yields hitting the highest since before the Fed’s December “pivot.” Swap traders ratcheted down their expectations for a central bank cut before July. The stock market’s “fear gauge” — the VIX — surged the most since October. And a measure of perceived risk in the US investment-grade corporate bond market soared — with three issuers getting sidelined.