Wall Street Ends Lower Over Inflation Warning

With investors bracing for what the White House warned could be an "extraordinarily elevated" inflation report, US stocks closed lower on Monday.

Rising prices have been a source of concern for months, though it did not stop the equities rally in March, but the Russian assault on Ukraine, and Western sanctions on Moscow, have worsened the situation, sending energy prices soaring.

"It's a continuation of all the worries that we've been talking about for weeks about inflation, inflation, inflation," said Karl Haeling of LBBW.

The yields on US Treasury debt has been rising in response to the concerns, which Haeling called the "biggest factor that's really hurting the stock market."

The Dow Jones dropped 1.2 percent to 34,308, and the S&P 500 fell 1.7 percent to 4,412.

Tech shares were hit even harder, and the Nasdaq sunk 2.2 percent to close at 13,411.

It was the first trading day of a holiday-shortened week ahead of Easter, and low volume can also cause bigger swings in share prices.

The US government is set to release the consumer price index for March on Tuesday, after inflation rose 7.9 percent over the 12 months to February, the biggest increase in 40 years.

Calling it the "Putin price hike," White House Press Secretary Jen Psaki told reporters, "We expect March headline inflation to be extraordinarily elevated."

Accelerating prices have prompted a train of Federal Reserve officials to signal plans to increase interest rates aggressively to help tamp down inflation, which has given rise to concerns of an economic downturn.

Yet another Fed policymaker on Monday said a half-point rate increase is possible in May, following the quarter-point hike in March. (AFP)