Market Meltdowns the last week signalled the market’s growing concerns over worsening economic fundamentals and a disturbing near-term outlook due to the government’s indecision on economic challenges. US stocks slide on data showing US inflation to remain high
The tech-heavy Nasdaq 100 tumbled about 3 percent amid a rout in giants like Tesla and Apple.

The latest fall was driven by a combination of factors ranging from deteriorating fiscal conditions, increasing external-sector difficulties, political uncertainty ahead of the next budget and bearish trends overtaking global stock markets on rising US interest rates.

But the most important factor has been the failure of the new coalition government to come up with a credible plan to take politically tough decisions to fix the economy. For example, it remains undecided about the reversal of the fiscally unsustainable energy subsidies, which is the ‘prior action’ that IMF wants it to take before it agrees to restart funding.

April’s consumer price index report is expected to show inflation has already reached a peak — a development that some investors say could temporarily soothe markets.

But economists say, even with a reprieve in headline inflation, core inflation could gain on a monthly basis and stay elevated for months to come. Core inflation excludes food and energy costs.

The CPI report is expected to show headline inflation rose 0.2% in April, or 8.1% year-over-year, according to Dow Jones. That compares with a whopping 1.2% increase in March, or an 8.5% gain year-over-year. The April data is expected at
8:30
a.m. ET Wednesday.

Core CPI is expected to rise 0.4% or 6% year-over-year. That compares with 0.3% in March, or 6.5% on an annualized basis.