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Global stocks slid on Wednesday as investors reacted to inflation overseas beating expectations and the Federal Reserve hinting it may consider altering monetary policy sooner rather than later.
The
Dow Jones Industrial Average
fell 164 points, or 0.48%, while the
S&P 500
dropped 0.29% and the
Nasdaq Composite
was essentially unchanged. Major U.S. stock indexes finished lower on Tuesday as enthusiasm over a strong batch of retailer earnings competed with concerns over lofty valuations and signs of some inflationary pressures. Weaker-than-expected housing data didn’t help.
A weak day in Asia saw the
Nikkei 225
drop 1.3% and Australia’s
S&P/ASX 200
benchmark lose nearly 2%. The Stoxx Europe 600 slid 1.5%, with commodity and tech stocks driving losses.
“Most investors could no longer turn a blind eye on rising inflation, knowing that the taper conversation will have to happen sooner rather than later,” writes Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
U.K. data showed consumer prices rose 1.5% on the year in April, twice the rate of inflation reported in March, according to the Office for National Statistics.
In the minutes of the Federal Open Market Committee meeting of Apr. 27-28, the central bank hinted it may soon consider reducing the size of its bond purchases, which would lower bond prices, lift their yields and put downward pressure on stock valuations.
Oil prices were also under pressure, with crude and Brent futures dropping nearly 3% each. Those losses came after data from the American Petroleum Institute showed an unexpected rise in U.S. crude supplies, and reports of potential progress on Iranian nuclear talks.
And Bitcoin prices slid after dropping below the $40,000 level earlier on Wednesday, following the People’s Bank of China’s warning that digital currencies can’t be used as payments.
Technology names were under pressure, with heavily weighted semiconductor equipment provider
ASML Holding
dropping 0.22% on the Nasdaq. Shares of German business software group
SAP
fell 0.62% in U.S. trade.
Shares of
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Read More: Why Is the Stock Market Down Today? Inflation Worries Spook Investors.