Here's What's Happening in Markets Today: April 10

Markets plummet as inflation report wrecks investors’ rate cut hopes.

Kristin
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SVP Content / Editor in Chief
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Reviewed by: etf.com Staff
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Edited by: Ron Day

Markets are in the red to kick off Wednesday trading after the consumer price index (CPI), an important gauge of inflation, rose more than expected. 

According to the Bureau of Labor Statistics (BLS), CPI jumped 0.4% for the month of March over the previous month compared to the 0.3% rise economists polled by Dow Jones had originally forecast

The hotter-than-expected inflation figures sank investor hopes that a rate cut would be coming as soon as the Fed's June policy meeting. Market probability of a June rate cut plummeted to roughly 20%, according to the CME Fed Watch Tool, dropping from a more than 50% chance just last week.

As markets took a leg lower, index ETFs were also in the red. SPY, the SPDR S&P 500 ETF Trust dropped more than 1% while DIA, the SPDR Dow Jones Industrial Average ETF Trust sank 1.25%.

Treasury yields jumped after the inflation report, particularly on the 10-year, a popular benchmark for mortgages and other loans. TLT, the iShares 20+ Year Treasury Bond ETF, was down over 1% after market open as bond prices dropped. Yields and prices have an inverse relationship.

Bond ETFs have been on a rollercoaster ride this year as investors question whether the Fed will cut rates — and when.

TLT 1-MONTH TOTAL RETURN 

Currently the price of TLT is sitting at just over $91, close to the lows for the year.

The inflation report also hit real estate and technology equity prices. Higher rate environments keep real estate under pressure as mortgages and loans become more expensive, keeping buyers on the sidelines. VNQ, the Vanguard Real Estate ETF tumbled nearly 3.5% after the inflation report.

And for growth stocks like technology, higher interest rates take a bite out of future profits. While tech stocks have soared despite the higher rate environment over the past year, today's inflation report sent tech ETFs skidding. QQQ, the tech-heavy Invesco QQQ Trust slid nearly 1%.

Kristin Myers is an award-winning journalist, who covers business and finance news. She is the current Senior Vice President of Content and Editor in Chief of etf.com. Kristin was most recently the Editor-in-Chief of the economics website The Balance, and an on-air anchor and reporter at Yahoo Finance. 

She hosted Yahoo Finance Live daily, providing afternoon coverage and reporting on markets, and the economy in the hours before the final bell. She was also one of the creators and hosts of “A Time for Change,” a weekly program that explores race, diversity, and inclusion in the world of business, finance, and politics. 

Earlier in her career, Kristin helped launch Al Jazeera America, where she produced high-profile guest segments and was part of field teams for special coverage, including the protests in Ferguson, and the funeral of Nelson Mandela in South Africa.

She has also worked with other news organizations including Bloomberg News, MSNBC, and others, in the U.S. and abroad.