Wall Street falls for third day on inflation jitters, crypto plunge

Wall Street's main indexes fell for the third straight session on Wednesday, as a steep fall in cryptocurrencies and fears over inflation pushed investors away from riskier assets.

Bitcoin and ether were on track to post their largest one-day loss since March last year, in the wake of China's move to ban financial and payment institutions from providing cryptocurrency services.

Crypto-exchange operator Coinbase Global fell 5.6pc, bitcoin bank Silvergate Capital Corp shed 3.0pc and miners Riot Blockchain and Marathon Digital Holdings were down 7.5pc and 9.0pc, respectively.

Tesla Inc, which has invested in the digital currency, dropped 4.2pc, while payments companies Mastercard, Square and PayPal that accept crypto payments fell between 0.6pc and 3.2pc.

"Today is going to be all about the fall of cryptocurrencies and the crash has definitely had a spill over effect into equity markets, which are already burdened with inflation worries," said Dennis Dick, head of markets structure, proprietary trader at Bright Trading LLC in Las Vegas.

"We have seen a flight into commodities and other asset classes from equities as investors look to hide from inflationary effects, but now most assets are crowded and the Fed is handcuffed as a tighter policy would mean most of the cash might disappear from markets."

Investors will also focus on minutes from the Fed's April policy meeting, where it stood pat on interest rates. The statement is due to be issued at 2 p.m. ET (1800 GMT).

Strong inflation readings and signs of a worker shortage in recent weeks have fueled fears of inflation and roiled stock markets despite reassurances from Fed officials that the rise in prices would be temporary.

All 11 major S&P sectors dropped, with financials and materials leading declines.

The CBOE volatility index, a measure of investor anxiety, jumped 2.5 points to 23.82.

Wall Street's main indexes fell in a late-session selloff on Tuesday as weak housing starts data overshadowed better-than-expected earnings from Walmart and Home Depot.

Stimulus checks helped U.S. home improvement chain Lowe's Companies Inc report better-than-expected quarterly same-store sales growth and Target Corp post a surge in sales.

Shares of Lowe's fell 2.3pc and Target rose 4.7pc.

At 11:48 a.m. ET, the Dow Jones Industrial Average was down 414.91 points, or 1.22pc, at 33,645.75, the S&P 500 was down 44.22 points, or 1.07pc, at 4,083.61, and the Nasdaq Composite was down 115.69 points, or 0.87pc, at 13,187.95.

The yield on 10-year Treasury notes fell after touching a one-week high earlier in the session.

Take-Two Interactive Software Inc rose 5.2pc after reporting quarterly profit and sales above analysts' estimates.

Declining issues outnumbered advancers for a 4.21-to-1 ratio on the NYSE and for a 2.84-to-1 ratio on the Nasdaq.

The S&P index recorded two new 52-week highs and no new low, while the Nasdaq recorded 12 new highs and 35 new lows.