CNBC Daily Open: Hot inflation data spooks Wall Street

Hang Seng and CSI 300 indices led losses in Asia, primarily influenced by consumer cyclicals and tech stocks. In Japan, the Nikkei 225 slipped, while Topix gained as investors awaited updates on the country’s spring wage talks. Wall Street ended lower after a higher-than-expected inflation gauge increased Treasury yields. The Dow snapped a three-day winning streak, losing over 100 points, and the S&P 500 and Nasdaq each fell around 0.3%. Japan’s ongoing wage negotiations are essential to the Bank of Japan’s decision on its negative interest rate policy. The possibility of a wealth tax in the US has sparked debate, prompted by President Biden’s proposed “billionaire tax.” HSBC remains optimistic about China’s mid- to long-term economic outlook despite ongoing challenges. Investment firm Fidelity International suggests looking beyond highfliers like Nvidia to find potential winners in the AI wave. February’s wholesale prices came in higher than expected, impacting Wall Street and putting pressure on Treasury yields. The inflation data poses challenges for the Fed in balancing the economy and maintaining price stability. Economists anticipate the data will affect the Fed’s preferred inflation gauge for February. The forecast suggests a rise in the core PCE deflator, potentially leading to a delay in rate cuts.