WS #15913
US CPI data came in at 3.7%, significantly above expectations, while French inflation hit a three-year high of 3.1%. This data has effectively ended market hopes for an imminent rate cut, forcing a repricing of growth assets. The resulting risk-off sentiment has driven Nasdaq futures down 1% and contributed to an 8% overnight drop in South Korea's KOSPI. The market is now pricing in a 'higher-for-longer' interest rate environment, which is particularly damaging to high-multiple tech stocks and consumer discretionary sectors.
Inflation and Rate Cut Hopes Dashed
US CPI data came in at 3.7%, significantly above expectations, while French inflation hit a three-year high of 3.1%. This data has effectively ended market hopes for an imminent rate cut, forcing a repricing of growth assets. The resulting risk-off sentiment has driven Nasdaq futures down 1% and contributed to an 8% overnight drop in South Korea's KOSPI. The market is now pricing in a 'higher-for-longer' interest rate environment, which is particularly damaging to high-multiple tech stocks and consumer discretionary sectors.