Stocks slid after data showed that US inflation will remain high for quite some time, adding to concern the Federal Reserve may be forced to unleash further tightening measures that could tip the economy into a recession.Remarks from Fed Bank of Atlanta President Raphael Bostic didn’t help sentiment either as the official said he’s open to “moving more” on rates if inflation persists at elevated levels. The S&P 500 erased gains and dropped to its lowest since March 2021, while the tech-heavy Nasdaq 100 tumbled about 3% amid a rout in giants like Tesla Inc. and Apple Inc. Small caps sank after a rally that approached 2% earlier in the day. The Treasury curve flattened, with the gap between two- and 10-year yields narrowing nine basis points.Investors seem to agree that a 75 basis-point hike isn’t likely, according to pricing in federal-fund futures markets. But they did increase bets that the Fed will roll out another half-point hike in September — following increases of that size in June and July. The US central bank hiked interest rates by a half-point last week and Fed Chair Jerome Powell signaled that similar rate increases are on the table for the next two meetings, while pushing back against making a larger move.
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