US stocks sank on Tuesday after the worse-than-expected inflation data dampened hopes of interest rates cut in May.
At 9:42 a.m. ET, the Dow Jones Industrial Average was down 427.32 points, or 1.10 per cent, at 38,370.06, the S&P 500 was down 66.94 points, or 1.33 per cent, at 4,954.90, and the Nasdaq Composite was down 303.61 points, or 1.90 per cent, at 15,638.94.
At the opening bell, the Dow Jones Industrial Average fell 98.21 points, or 0.25 per cent, to 38,699.17. The S&P 500 opened lower by 53.90 points, or 1.07 per cent, at 4,967.94, while the Nasdaq Composite dropped 343.67 points, or 2.16 per cent, to 15,598.88.
Shares of Microsoft fell 2.3 per cent and Nvidia lost 2.1 per cent.
Chip stocks such as Micron Technology, Advanced Micro Devices and Broadcom dropped between 2.5 per cent and 4.5 per cent.
Shares of Coca-Cola gained 1.2 per cent as the company beat expectations for fourth quarter revenue.
A Labor Department report showed US consumer prices rose more than expected in January amid rise in the costs of shelter and healthcare.
After the inflation data, Treasury yields jumped. The yield on the 10-year Treasury rose to 4.25 per cent from 4.18 per cent late on Tuesday. The 2-year yield leaped to 4.57 per cent from 4.47 per cent.
Asian stock markets were mixed on Tuesday. Japan’s Nikkei 225 edged up 2.9 per cent at 37,963.97.
Hong Kong’s Hang Seng Index and China’s Shanghai Composite were closed for holiday.
Oil prices edged up on Tuesday on uncertainties over fighting in the Middle East.
Brent futures were up 54 cents to $82.54 a barrel at 1224 GMT. US West Texas Intermediate (WTI) crude was up 50 cents at $77.42 a barrel.
Gold prices rose on Tuesday. Spot gold was up 0.4 per cent at $2,027.99 an ounce by 1145 GMT. US gold futures were up 0.4 per cent at $2,041.80.
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