The Dow plunges 500 points as inflation rises as crushes Fed hopes

The Dow Jones Industrial Average and the other major U.S. stock market indexes were bleeding Wednesday morning as March inflation data came in higher than anticipated.

The Consumer Price Index (CPI) for March showed an annual rate of inflation of 3.5%, up from 3.2% in February, primarily because of rising rents and gas prices. Economists had predicted an inflation rate of 3.4% — still down from 2022 highs but well below the Fed’s target rate of 2%.

The data left investors uncertain about whether the Federal Reserve will cut interest rates this year as hoped.

The Dow quickly plunged 514 points, or 1.3%, to 38,369 shortly after markets opened — now far from crossing the 40,000 mark like it almost did just a few weeks ago. The S&P 500 and the Nasdaq both dropped about 1.1%.

Meanwhile, the 10-year Treasury yield went up 4.5% on Wednesday after the inflation report.

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