Wall St slides as inflation woes dampen rate-cut bets

investing.com:

By Bansari Mayur Kamdar and Shashwat Chauhan

(Reuters) — Wall Street's main stock indexes fell on Friday, with the tech-heavy Nasdaq leading losses on worries that hotter-than-expected inflation figures could sully hopes of an early start to the Federal Reserve's rate-easing cycle.

Ten of the 11 major S&P 500 sectors were trading lower. Rate-sensitive technology stocks led the decline and were down 1.2%.

Most megacap growth stocks were under pressure, with Microsoft (NASDAQ:MSFT) down 2.0%, while AI giant Nvidia (NASDAQ:NVDA) shed 1%.

The Philadelphia Semiconductor index fell 1% and was on track to its worst weekly performance since January, ahead of the global GTC developer conference from March 18 to 21, which will be scrutinized for AI-related announcements.

Overall, Wall Street's AI-driven rally has stalled, as chip stocks lose some steam and recent data pointed to sticky inflation. The tech-laden Nasdaq was on track to ending its second straight week lower.

All eyes are now on next week's Federal Reserve meeting for possible clues on the timing of the central bank's first interest-rate cut this year.

Traders have reined in bets of a June rate cut by the Fed to about 58% from 73% last week, according to the CME FedWatch Tool.

«The earliest possible cut could be June, though we wouldn't be shocked to see that delayed to later in the year if the data continues to come in hot, as recent data has,» said Carol Schleif, chief investment officer at BMO Family Office.

At 11:26 a.m. ET, the Dow Jones Industrial Average was down 85.36 points, or 0.22%, at 38,820.30, the S&P 500 was down 24.55 points, or 0.48%, at 5,125.93, and the Nasdaq Composite was down 130.43 points, or 0.81%, at 15,998.10.

Friday also marked the