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March CPI at 3.5% YoY vs 3.4% estimate

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FOMC minutes of March policy meeting due at 2 p.m. ET

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Indexes down: Dow 1.19%, S&P 1.07%, Nasdaq 1.11%

(Updated at 11:20 a.m. ET/ 1520 GMT)

By Shashwat Chauhan and Shristi Achar A

April 10 (Reuters) - Wall Street's main stock indexes

tumbled on Wednesday as investors turned risk averse after a

stronger-than-anticipated inflation reading doused hopes of the

Federal Reserve kicking off its monetary easing cycle in June.

U.S. consumer prices increased more than expected in March

as Americans paid more for gasoline and rental housing, leading

financial markets to surmise that the central bank would delay

cutting interest rates until September.

The Consumer Price Index (CPI) rose 0.4% on a monthly basis

in March. Annually, it increased 3.5%, versus a 3.4% estimated

growth.

Excluding volatile food and energy components, the core

figure rose 0.4% month-on-month in March. Annually, it gained

3.8%, versus the estimated 3.7% increase.

"If it were the only number that was disappointing, we would

say let's not make too big a deal about it, but this is the

third month in a row that the report has been hotter than

expected," said Bob Doll, CEO and CIO at Crossmark Global

Investments.

"So what it's saying is inflation is not under control

and the Fed therefore is unlikely to lower rates anytime soon."

Traders slashed bets of the Fed cutting interest rates in

June after the CPI report, estimating that the central bank will

wait until September before it makes its first cut.

Yields across government bonds spiked after the data was

released, with the 10-year note climbing back to

4.5008% - its highest level since last November.

Minutes of the Fed's March meeting, where it stuck to its

guidance of three rate cuts this year, are due later in the day

and could be crucial in gauging the central bank's stand on

policy easing.

All 11 S&P 500 sectors were trading lower. The real estate

sector, which led declines, fell 4.0% and was on track

for its worst single-day drop since June 2022.

Other rate-sensitive sectors such as utilities

dropped 1.8%, while the small-cap Russell 2000 Index lost

2.4%.

At 11:20 a.m. ET, the Dow Jones Industrial Average

was down 460.95 points, or 1.19%, at 38,422.72, the S&P 500

was down 55.84 points, or 1.07%, at 5,154.07, and the

Nasdaq Composite was down 181.29 points, or 1.11%, at

16,125.35.

Most megacap growth stocks slipped, but AI giant Nvidia ( NVDA )

bucked the trend and was last up 1.4%.

Among single stocks, U.S.-listed shares of Alibaba

gained 1.3% after the company's co-founder Jack Ma penned a

lengthy memo to employees on Tuesday, expressing support for the

internet giant's restructuring efforts - a rare move from the

billionaire who has spent the last few years away from the

spotlight.

Declining issues outnumbered advancers for a 8.09-to-1 ratio

on the NYSE and for a 3.99-to-1 ratio on the Nasdaq.

The S&P index recorded three new 52-week highs and seven new

lows, while the Nasdaq recorded 26 new highs and 128 new lows.