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.