Rising prices rock markets and tech stocks as Bitcoin plunges below $27,000

Rising prices, and the possibility of looming interest rate hikes, are rattling global markets and tech stocks, while the price of Bitcoin has plunged below $27,000 ($39,000).

The Australian stock market is following this global sentiment.

At 1 pm AEDT, the ASX 200 was down 1.1 percent. The All Ords had similarly lost.

By the end of the day, it was even lower.

The ASX 200 closed down 1.75% at 6,941 points. That was a 50 day minimum.

The worst performing stocks included Altium (-16.6pc) and Xero (-13.2pc).

Overall, All Ords also lost 1.9 percent. This equates to $46 billion being removed in one day.

Technology stocks were the worst performers with the sector falling 8.9 percent overall. That followed the path of the Nasdaq in the US.

Why did the markets fall?

The tech-heavy Nasdaq sank 3 percent in the US on Wednesday (local time) as the latest inflation data was released there.

It showed that the cost of daily necessities, including food and housing, continues to rise in the United States, with inflation there now running at 8.3 percent a year.

Further interest rate hikes are now being hinted at, after April data showed that US inflation was not slowing as fast as many experts anticipated.

Meanwhile, the Dow Jones and S&P 500 lost 1 percent and 1.6 percent, respectively.

Tech losses are being replicated in the cryptocurrency market.

Bitcoin has dropped sharply again this week.

It has lost more than a third of its price in a week, dropping from over US$40,000 to under US$27,000 as of 4:30pm AEST.

This latest accident prompted the founder of one of the largest Bitcoin holders to post a photo of himself working at McDonald’s.

Charging

The Australian dollar also hit a low of 68.80 cents.

City Index Senior Market Analyst Tony Sycamore said it looked like cash was being put into the “safe haven” of the US dollar.

“US 10-year yields are trading at 2.87 percent after trading at 3.20 percent three days ago.”

What did the US inflation data show?

In April, data showed the CPI rose 0.3 in the US. The rise came even with a large drop in fuel prices and beat many economists’ predictions.

This puts the US annual inflation rate at 8.3 percent.

While these rates surprised the markets, they still show that the price surge is starting to die down from earlier this year.

April’s increase was significantly down from the 1.2 percent rise in March, when fuel prices were weighing on global economies.

Increases in the cost of housing, food, airline tickets and new cars were some of the biggest factors behind April’s price increases.

Aware , updated

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