US stocks slid on Wednesday morning after June inflation data came in hot with the year-over-year increase of 9.1% in the Consumer Price Index, the highest annual rise since November 1981.
“This was an eye-popping number. There’s no sugar-coating 9% inflation,” said Brian Jacobsen, senior investment strategist for Allspring Global Investments.
Investors are worried that the new data could incentivize the Federal Reserve to hike interest rates more than expected during their meeting later this month.
“Inflation is becoming entrenched and this is exactly what investors and central bankers worry about the most,” said Jeffrey Roach, chief economist at LPL Financial. “The Fed will likely hike rates by 75 basis points later this month, especially since the job market is strong enough to support the front-loading of rate hikes.”
The Dow lost 210 points, or 0.7%, on Wednesday.
The S&P 500 dropped by 0.9%.
The Nasdaq Composite fell 1.2%.