Inflation Data hitting Global Stocks with Benchmark Yields

Important U.S. Inflation data, plummeting technology stocks, and rising benchmark bond rates weighed on major global market indices on Thursday. Consumer prices in the United States climbed steadily in January, resulting in the largest annual increase in Inflation in 40 years, fueling financial market anticipation that the Federal Reserve will raise interest rates by 50 basis points next month.

The Nasdaq has lost more than 2% in a single session for the seventh time in 2022. In 2022, the S&P 500 is down around 5%, while the Nasdaq is down approximately 9%. Tech stocks, which had propelled U.S. stocks to record highs earlier in the week, have dropped 2.75 percent. After clinging to gains for much of the session, the MSCI world equity index dropped. As a result of higher bond yields, the pan-European STOXX 600 index fell 0.2 percent.

The heavyweight technology sector dropped more than 1%, dragged down by losses at France’s Atos. The FTSE 100 gained 0.38 percent, while the German DAX gained 0.05 percent. The larger stock market surge this week was aided by a recent decrease in government bond yields and a tech-fueled rebound. After a January in which investors panicked about the impact of increasing rates and less cheap money on highly valued shares.

Most markets are still down substantially for the year, with the tech-dominated Nasdaq 100 down 8%. At its March meeting, the Fed is widely expected to begin hiking rates. Following the release of the US consumer price report, federal funds rate futures have increased the likelihood of a half-point tightening by the Federal Reserve at its meeting next month. When U.S. Inflation data sent long-term bond yields whipsawing, they were continuing their downward trend.