TOKYO (AP) — Shares declined Wednesday in Asia after disappointingly high U.S. inflation data sent stocks sliding on Wall Street and raised prospects that interest rates will remain elevated for longer.

Regional market watchers were paying close attention to the outcome of the presidential election in Indonesia, one of Southeast Asia’s biggest economies and a supplier of strategically important resources like nickel.

Hong Kong’s Hang Seng index resumed trading after the Lunar New Year holiday, edging 0.7% higher to 15,861.77 after opening lower. Markets in mainland China remain closed all week.

Japan’s benchmark Nikkei 225 shed 0.7% to 37,703.32. Australia’s S&P/ASX 200 dipped 0.7% to 7,574.70. South Korea’s Kospi fell 1.1% to 2,623.19.

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India’s Sensex sank 0.7% and the SET in Bangkok lost 0.6%.

Tuesday on Wall Street, the S&P 500 tumbled 1.4% to 4,953.17 as traders delayed forecasts for when the Federal Reserve will deliver the cuts to interest rates they crave so much. The hotter-than-expected inflation report may mean the first cut won’t come in March.

Tuesday’s report from the Labor Department showed that the consumer price index rose 0.3% from December to January, up from a 0.2% increase the previous month. Compared with a year ago, prices were up 3.1%.

The Dow Jones Industrial Average dropped 1.4% from its record set a day earlier, closing at 38,272.75. The Nasdaq composite, which has been flirting with its all-time high set in 2021, sank 1.8% to 15,655.60.

High interest rates hurt all kinds of investments, and they tend to particularly hurt high-growth stocks like technology companies. A 2.2% drop for Microsoft and 2.1% tumble for Amazon were the two heaviest weights on the market.

The losses were widespread, and nearly 90% of the stocks in the S&P 500 fell in one of the biggest speed bumps for the index since its big, record-setting rally began in late October.

Much of that rise was due to hopes that inflation was cooling enough for the Fed to cut rates and relax the pressure on the economy.

Stocks of smaller companies fell even more because high rates could hurt them more than bigger rivals by making it more difficult to borrow cash. The Russell 2000 index of smaller stocks plunged 4% for its worst day since two summers ago.

Yields jumped in the bond market as traders built up expectations for the Fed to keep rates high for longer. The yield on the 10-year Treasury rose to 4.31% from 4.18% late Tuesday.

The two-year Treasury yield, which moves more on expectations for the Fed, leaped to 4.66% from 4.47%.

Even after the surprising inflation report, the likeliest outcome is still for the economy to manage a perfect landing and avoid a painful recession as inflation cools, according to Alexandra Wilson-Elizondo, co-chief investment officer of the multi-asset solutions business in Goldman Sachs Asset Management.

But she said there is still a risk that the economy will fall into a recession under the weight of high interest rates, or that inflation will reaccelerate, partly because of how much Treasury yields have already fallen.

Fed officials have said they were penciling in three cuts to rates this year, as inflation hopefully cools toward their 2% target from its peak above 9% two summers ago. Earlier, traders were forecasting as many as six cuts in 2024. Now, they’re largely betting on three or four cuts.

Critics have been warning that stock prices may have climbed too far, too fast given too-optimistic hopes for rate cuts and other risks.

Moody’s tumbled 7.9% for the worst loss in the S&P 500 after the credit-rating company reported weaker profit for the latest quarter than Wall Street had forecast.

On the winning side, JetBlue Airways soared 21.6% after activist investor Carl Icahn disclosed he has built up an ownership stake in the airline and said he sees the stock as undervalued.

In other trading, benchmark U.S. crude slipped 4 cents to $77.83 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, fell 7 cents to $82.70 a barrel.

The U.S. dollar was hovering above 150 Japanese yen, falling to 150.51 yen from 150.86 yen.

The euro cost $1.0715, little changed from $1.0712.