U.S. stocks tumbled across the board in a broad selloff after a hotter-than-expected inflation report may jeopardize the Federal Reserve’s plan to cut interest rates. 

The Dow Jones Industrial Average fell over 500 points intraday or 1.4% and is on pace for the worst session in 11 months. 

The benchmark has erased almost half its gains for 2024. 

The consumer price index for January rose by 3.1% on an annual basis, economists had forecasted inflation would hit 2.9%. The producer price index, due Wednesday, will also be closely watched.  

CONSUMER INFLATION FOR JANUARY COMES IN HOT

"We continue to expect the FOMC to leave the Fed funds rate unchanged at the March meeting and to begin the easing cycle in May" said Jan Hatzius, chief economist at Goldman Sachs, in a note to clients on Tuesday. 

While over  91% of market participants agree with Hatzius, the majority, 62%, don't expect any move at the May meeting, according to the CME's Fed Watch Tool. 

The S&P 500 and Nasdaq Composite slid 1.3% and 1.5%, respectively. 

Real estate, utilities and financials paced the selloff in the broader market, while energy and healthcare companies fell the least.