Inflation, Rates Fears Leave Wall Street Back In Red

Wall Street resumed its slide on Thursday, ending in the red as inflation hit a four-decade high, cementing expectations that the US Federal Reserve would hike key interest rates at the conclusion of next week's monetary policy meeting to prevent the economy from overheating.

Looming uncertainties surrounding Russia's attack on Ukraine also helped convince market participants to recommence their flight to safety.

While all three major indexes ended in the red, they pared their losses late in the day and closed well above session lows, as the US equities market followed its best day in months on Wednesday by renewing a multi-session sell-off.

"It's more of the same," said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago, noting that the equity market's daily volatility is "being driven more by geopolitical than economic news."

Consumer prices surged in February to a 7.9 percent annual growth rate, according to the Labor Department, the hottest reading in forty years.

"The (CPI) print was not far off estimates," Nolte added. "There will be more to come in the next month or two as some of the rising commodity prices get incorporated."

While the market fully expects the central bank to raise the Fed funds target rate by 25 basis points at the conclusion of next week's monetary policy meeting, the CPI data suggested the FOMC could move "more aggressively" to curb inflation in the upcoming year, as promised by Fed Chair Jerome Powell last week.

Amazon.com provided one of the day's bright spots, its shares jumping 5.4 percent after the e-commerce giant announced a 20-for-1 stock split and a US$10 billion share buyback.

The Dow Jones Industrial Average fell 0.34 percent, to 33,174, the S&P 500 lost 0.43 percent, to 4,260 and the Nasdaq Composite dropped 0.95 percent, to 13,130.

Goldman Sachs Group Inc became the first major U.S. investment bank to announce it was closing operations in Russia. Its shares dropped 1.1 percent. (Reuters)