01:26 PM EDT, 04/10/2024 (MT Newswires) -- US equity indexes slid Wednesday as hotter-than-expected consumer price inflation cut the possibility of interest rate reduction in June substantially, sending government bond yields sharply higher.

The S&P 500 slumped 1.1% to 5,154.4, with the Nasdaq Composite down 1% to 16,143.5 and the Dow Jones Industrial Average 1.2% lower at 38,411.1 after midday. All sectors were in the red intraday. Real estate was the steepest decliner, followed by utilities and materials.

In economic news, the consumer price index rose 0.4% sequentially in March, the Bureau of Labor Statistics said Wednesday, matching February's growth rate but ahead of the 0.3% consensus, according to a Bloomberg-compiled survey. Annually, the rate accelerated to 3.5% from 3.2% in the previous month, higher than the estimate of 3.4%.

The core inflation rate, which excludes the volatile food and energy components, rose 0.4% in March, unchanged from the prior two months but above the 0.3% expected. On an annual basis, core inflation came in at 3.8%, above the 3.7% market forecast.

The supercore, defined as core services excluding housing, rose 0.7% in March, a two-month high, and jumped 4.8% over the past 12 months, according to a note from Stifel.

Following the hot inflation data, the probability that the Federal Open Market Committee will begin easing policy in June plummeted to 16%, versus 56% a day ago, according to the CME Group's FedWatch tool Wednesday. The likelihood of rates remaining unchanged jumped to 83% versus 43% at the close on Tuesday.

"Forget rate cuts in 2024? That's a very distinct possibility," Derek Holt, head of capital markets economics at Scotiabank, said in a note.

The US 10-year yield soared 19 basis points to 4.56%. A 23 basis-point surge in the two-year Treasury pushed the yield to 4.98%. The yields on 10- and two-year are now the strongest since November.

"The whole front-end [of the yield curve] blew up after another strong inflation reading out of the US," Holt said in the note. "The result drove a nearly instant response from markets as fed funds futures almost entirely wiped out pricing for a June cut by the FOMC."

Bloomberg data show that the average yield on the 10-year from 1961 to now is 5.85%, according to a note from the Wells Fargo Investment Institute. The data also showed that average consumer price index inflation has been 3.8% over the same timeframe, implying an average real rate of about 2.05%. Applying the same rate to the CPI reading, the 10-year yield should be "well above the current level based on the average long-term relationship of the data."

The US Dollar Index advanced 1.1% to 105.27, the highest since November.

In contrast, gold fell 0.2% to $2,356.5 per ounce, retreating from a record high on Tuesday.

West Texas Intermediate crude oil rose 0.3% to $85.44 a barrel.

In company news, Delta Air Lines ( DAL ) reported Q1 results above market estimates, buoyed by robust travel demand, which the carrier continues to see in the ongoing three-month period. Shares were down 0.4%.

Morgan Stanley lifted its price target for NVIDIA ( NVDA ) to $1,000 from $795, as analysts at the investment bank expect continued strengthening of the technology giant's business. The overweight rating on the stock was left unchanged. Shares of Nvidia ( NVDA ) were up 1.7% intraday, among the top gainers on the Nasdaq and the S&P 500.