Bonds drop, stocks slide as inflation fears mount

Bonds drop, stocks slide as inflation fears mount

Stocks















Bloomberg

Stocks and US equity futures dropped, while bonds fell Tuesday as euro-zone inflation accelerated to a fresh all-time high, intensifying the debate at the European Central Bank (ECB) about how rapidly to raise interest rates.

S&P 500 and Nasdaq 100 contracts slipped at least 0.3%. Europe’s Stoxx 600 Index was set to snap four days of gains, retreating from a one-month high. Treasury yields climbed across the curve, joining Monday’s selloff in German bunds and European bonds. The dollar advanced.

Brent crude oil rose above $120 a barrel after the European Union agreed to pursue a partial ban on Russian oil. Higher energy and food costs are keeping upward pressure on prices globally and squeezing consumers. Euro-zone consumer prices jumped 8.1% from a year earlier in May, exceeding the 7.8% median estimate in a Bloomberg survey. The acceleration was driven by food and energy after Russia’s invasion of Ukraine.

Global stocks are on track to end the month with modest gains amid skepticism about whether the market is near a trough and as volatility stays elevated. Fears that central bank rate hikes will induce a recession, stubbornly high inflation