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US stocks stumbled on Wednesday after a key inflation report showed an unexpected uptick in consumer prices last month.

The Dow Jones Industrial Average (^DJI) fell about 1.1%, or almost 425 points. The S&P 500 (^GSPC) dropped nearly 1%, and the techheavy Nasdaq Composite (^IXIC) lost almost 0.9%.

Meanwhile, bond yields soared. The 10year Treasury yield (^TNX) gained as much as 20 basis points on Wednesday afternoon, hitting nearly 4.57%, its highest level since November.

The moves came after government data showed the Consumer Price Index (CPI) rose 0.4% over the previous month and 3.5% over the prior year in March, an unexpected acceleration from February's 3.2% annual gain in prices.

Both measures came in ahead of economist forecasts of a 0.3% monthovermonth increase and a 3.4% annual increase, according to a survey by Bloomberg.

The hotterthanexpected print could prompt investors to expect fewer rate cuts from the Fed this year. Indeed, according to the CME FedWatch tool, around 80% of bets are now on the Fed holding steady at current rate levels in June. More than half of investors also expect the central bank to leave the rate unchanged through its July meeting, leaving September as the most likely spot for an initial cut from the US central bank.

Also out Wednesday, the latest minutes from the Federal Reserve's latest policy meeting showed "almost all" officials believed it would be appropriate to lower interest rates "at some point."

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