Asian equities dropped on Thursday, following Wall Street’s lead after a key United States report renewed fears of inflation and a tightening of monetary policies.

Stocks have been volatile for much of 2022, fueled by China’s Covid-19 lockdowns, Russia’s invasion of Ukraine and surging inflation that has dampened consumer sentiment.

Investors had been looking to the April US consumer price report in hopes that easing inflation would lower pressure on the Federal Reserve (Fed) to hike interest rates, but the 8.3-percent acceleration reported was higher than expected.

“Wall Street thought it was going to be done with inflation rearing its ugly head, but that does not appear to be the case,” said Edward Moya, senior market analyst at Oanda.

“Inflation is still expected to decelerate over the next few months, but it won’t be sharp, given the rising prices on gas, hotel, airfares and possibly a wide range of goods that will be impacted by China’s Covid lockdowns.”

Americans have felt the pinch of rising food prices, including big increases in dairy and cereal products.

The index for meat, poultry, fish and eggs surged 14.3 percent, the biggest since May 1979.

US President Joe Biden called April’s overall slowdown “heartening” — March saw a peak of 8.5 percent — but acknowledged that inflation was still a major challenge.

“Bringing it down is my top

economic priority,” he said.

After the release of the report, US stocks see-sawed through the day and ended with losses.

All three major indices finished firmly in the red. The tech-rich Nasdaq slipped 3.2 percent, weighed by big losses for Apple and Meta.

The mood filtered to Asia: Tokyo, Hong Kong, Sydney and Seoul were negative all day. In Europe, London dipped 2 percent at the open.

“We’re seeing the beginning of the capitulation and the great reset, if you want, in pricing,” Virginie Maisonneuve, global chief investment

officer for equity at Allianz Global Investors UK, told Bloomberg.

Oil prices jumped about 5 percent before paring some of those gains as concerns persisted about Russian energy supplies.

Ukraine said Russia had halted gas supplies through a key transit hub in the east of the country, fueling fears that Moscow’s invasion could worsen an energy crisis in Europe.

The “choppy” nature of crude prices is also due to uncertainty about “the timing of an EU (European Union) ban on Russian oil imports,” Michael Hewson of

CMC Markets said.

The lockdowns in China also affected sentiment.

Millions of people in the world’s second-largest economy have been under lockdown since April, including in its largest city and economic hub Shanghai. The restrictions have stopped up ports and snarled supply chains around the world.

China’s zero-Covid policy “will continue crimping growth, but it won’t be immune from the Ukraine/ Russia stagflationary wave either,” said Jeffrey Halley, another senior market analyst at Oanda.