U.S. stocks were lower in afternoon trading Wednesday, led by a more than 2% decline in the Nasdaq after U.S. consumer price index (CPI) data did little to ease investor worries over the outlook for inflation and interest rates.

The Labor Department's monthly report suggested inflation may have peaked in April but is likely to stay strong enough to keep the Federal Reserve on top of cooling it down.

The CPI increased 0.3% last month, the smallest gain since last August, while economists polled by Reuters had forecast consumer prices gaining 0.2% in April.

"There was not enough of a positive surprise to underpin the market," said Quincy Krosby, chief equity strategist at LPL Financial in Charlotte in North Carolina.

"This is a market still trying to come to grips with whether the Fed is going to be able to rein in inflation early on."

Consumer discretionary and technology led declines among S&P 500 sectors. The prospect of rising interest rates has hit growth stocks especially hard.

Energy shares were up sharply and helped to limit declines in the S&P 500 and Dow.

The Dow Jones Industrial Average fell 45.7 points, or 0.14%, to 32,115.04, the S&P 500 lost 22.23 points, or 0.56%, to 3,978.82 and the Nasdaq Composite dropped 235.83 points, or 2.01%, to 11,501.84.

The S&P 500 is down about 16% so far this year following concerns about how aggressively the central bank may need to raise rates, and also over the Ukraine war and the latest coronavirus lockdowns in China.

Coinbase Global Inc slid 24% after its first-quarter revenue missed estimates amid turmoil in global markets that has curbed investor appetite for risk assets.

Declining issues outnumbered advancing ones on the NYSE by a 1.21-to-1 ratio; on Nasdaq, a 2.40-to-1 ratio favored decliners.

The S&P 500 posted 1 new 52-week highs and 60 new lows; the Nasdaq Composite recorded 10 new highs and 1,075 new lows.