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US stocks were back in the red Wednesday, with poor results from retailer Target underscoring worries about corporate profits as companies navigate an inflationary environment.

After Tuesday's rally, all three major indices were decisively negative near midday, with the Dow Jones Industrial Average down 2.3 percent at 31,920.99.

The broad-based S&P 500 fell 2.6 percent to 3,981.19, while the tech-rich Nasdaq Composite Index slumped 3.0 percent to 11,625.08.

Shares of retailers from Walmart Inc to Macy’s Inc also slid.

Treasuries rose across the board, sending the 10-year Treasury yield 6 basis points lower. The dollar rose against all of its Group-of-10 counterparts, except the yen and Swiss franc.

British inflation surged to its highest annual rate since 1982 as energy bills soared, while Canadian inflation rose to 6.8% last month, largely driven by rising food and shelter prices, Statistics Canada data showed.

British inflation is now the highest among major economies but prices are rapidly rising worldwide, forcing central banks to hike interest rates despite the potential impact on growth as suggested by a modest decline in U.S. homebuilding in April.

Soaring prices and material shortages have already hit homebuilding, the sector of the economy most sensitive to rates. But the U.S. Commerce Department report also showed a record backlog of houses to be constructed, indicating a decline in homebuilding potentially would be marginal.

"The market is still headed lower into this summer for the reasons that we're seeing with these big box retailers. We still have an inflation problem," said Andrew Slimmon, a senior portfolio manager at Morgan Stanley Investment Management.

Gold prices were little changed as looming U.S. interest rate hikes and a resurgent dollar dimmed the metal's shine.

Spot gold added 0.1% to $1,815.70 an ounce.

Oil prices dipped in volatile trade as markets weighed expectations that China will ease COVID-19 restrictions against an unexpected fall in U.S. crude stockpiles as refineries processed more crude.

U.S. crude fell 1.54% to $110.67 per barrel and Brent was at $110.28, down 1.47% on the day.

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