Stocks and bonds slumped on Wednesday, as fresh inflation data highlighted Wall Street’s sensitivity to rising price across the economy accelerating again.

The S&P 500 fell as much as 1.1 percent in early morning trading, before moderating after testimony from Jerome H. Powell, the Federal Reserve chair, before Congress when he acknowledged that there was more to do to slow inflation further, even if the central bank was getting close to its target of 2 percent.

The Nasdaq Composite index, which is chock-full of tech stocks that have come under pressure recently from rising global competition to develop the chips that will power the development of artificial intelligence, also initially fell before rallying to trade flat in the afternoon.

Data from the Bureau of Labor Statistics on Wednesday showed that prices rose 3 percent for the year through January, more than analysts had expected. That is up from 2.9 percent in December. The “core” Consumer Price Index, which excludes volatile food and energy prices, rose 3.3 percent year-over-year.

Signs of continuing price pressure is likely to encourage the Fed to refrain from further interest rate cuts in the coming months. For stock investors, higher interest rates means slower business activity, which can weigh on companies’ earnings and stock prices.

The 10-year Treasury yield, a benchmark interest rate from which a host of consumer and corporate borrowing rates are calculated, rose 0.1 percentage points on Wednesday, on course for its largest move higher in a single day since December.

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