12:42 PM EDT, 04/10/2024 (MT Newswires) -- US equity indexes sank while government bond yields surged as hotter-than-expected consumer price inflation lowered bets for an interest-rate cut in June to less than a fifth from half a day ago.

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 on Wednesday. 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 Street's estimate of 3.4%.

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.

Following the inflation data, the probability that the Federal Open Market Committee will begin easing policy in June plummeted to just under 20%, versus 56% a day ago, according to the CME Group's FedWatch tool Wednesday. The likelihood of rates remaining unchanged jumped to more than 80% 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 14.7 basis points to 4.51%. A 19.6 basis-point surge in the two-year Treasury pushed the yield to 4.94%. 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."

The US Dollar Index advanced 1.1% to 105.26, the highest since November.

In contrast, gold fell 0.2% to $2,357.6 per ounce, retreating from a record high on Tuesday.

West Texas Intermediate crude oil rose 0.1% to $85.33 a barrel.

In company news, Delta Air Lines ( DAL ) reported first-quarter results above market estimates, buoyed by robust travel demand, which the carrier continues to see in the ongoing three-month period. Shares were down 1.1% in recent trading.