
Stocks plummeted, U.S. government bond yields rocketed higher and the dollar bounced, after fresh inflation data undermined investors’ bets over the slowing pace of inflation in August.The S&P 500 slumped more than 3 percent as trading opened on Tuesday. Stocks had nudged higher in recent trading sessions, rising 1.1 percent on Monday and nearly 5 percent over the past week, as investors increasingly bet on the Fed’s ability to lower inflation by raising interest rates without slowing the economy to the point of tipping it into a severe downturn.But higher-than-expected August inflation data released on Tuesday wrong-footed investors, sending stocks lower and prompting a rapid re-pricing of how much the Fed may need to raise interest rates …