Stocks slide on US inflation surge, tech weakness

Global stock markets experienced a broad decline on Wednesday, with major indices in New York closing sharply lower. The downturn was driven by a confluence of factors, including renewed strikes in the Middle East, a significant jump in US inflation, and a sell-off in technology shares.

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the inflation fire is burning, but it has not yet jumped every fence in the neighbourhood.

US consumer inflation surged to 4.2% year-on-year in May, up from 3.8% in April. This acceleration, following strong US jobs figures last week, has intensified expectations for a potential interest rate hike by the Federal Reserve. New Fed Chair Kevin Warsh is set to lead his first rate-setting meeting next week, with markets pricing in a roughly one-third chance of a hike by September.

However, analysts offered a nuanced view of the inflation data. Stephen Innes noted that while the headline figure rose, the core reading, which excludes volatile energy prices exacerbated by the Middle East conflict, held steady at 2.9%. "The inflation fire is burning, but it has not yet jumped every fence in the neighbourhood," he commented, suggesting the broader inflationary pressure might be contained.

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profit-taking in technology after a very strong two-month rally. I don't think anything fundamental has changed in terms of the artificial intelligence outlook and spending but it's more so (...) a natural pullback.

Adding to market uncertainty, fresh military exchanges between the United States and Iran escalated tensions. US President Donald Trump vowed further action after Iran downed a US helicopter, complicating prospects for peace and the reopening of the Strait of Hormuz to oil traffic. Oil prices saw a modest climb of about two percent, trading on hopes for a resolution and a potential easing of supply disruptions.

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The oil market is trading on hope that a resolution can be found, and on a loosening of oil supply.

Technology shares led the declines across Asian and European markets. Investors are reassessing lofty valuations and persistent inflation concerns, leading to what some describe as a "natural pullback" after a strong two-month rally. Angelo Kourkafas of Edward Jones suggested that fundamental outlooks for artificial intelligence spending remain intact, viewing the tech sell-off as a profit-taking measure rather than a sign of deeper issues.

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hit them again hard today