Stocks opened lower on Wall Street Wednesday after new figures showed inflation rose faster than expected, raising the specter of a more intense pace of interest rate increases than investors had anticipated. But within an hour, the main indexes were in positive territory.
The moves were the latest in a roller-coaster start to the year for the United States stock market. Wall Street indexes hit all-time highs in January, driven in large part by a bevy of positive economic data, a new tax law that would drastically cut the overall corporate tax rate, and years of easy access to money as a result of central bank policies.
But a long-running bull market has reversed sharply in the past two weeks. Central banks appear to be tightening monetary policy, which would raise the cost of borrowing and could eat into corporate profits, and data suggests that wage growth is accelerating in the United States. Several days of sell-offs last week pushed the United States stock market into a correction, indicating a severe downward trend.
The initial drop on Wednesday reflected that befor e trading started, January inflation data was released showing that prices rose 0.5 percent last month and 2.1 percent over the past 12 months, beating analysts’ expectations.
The yield on the United States Treasury’s 10-year note rose sharply on the inflation report, hovering close to 2.88 percent in morning trading.