US stock markets plunged amid fears of stagflation in the American economy, which grew at its slowest pace in nearly two years just as inflation jumped. Shares on Wall Street plummeted as official figures showed US GDP grew less than expected in the first three months of the year. The growth of 1.6pc was behind forecasts for 2.5pc and came as separate data indicated that inflation picked up at a faster pace than predicted. The core PCE prices index, which is closely watched by the Federal Reserve, rose to 3.7pc during the first quarter, ahead of analyst expectations of 3.4pc. As a result, traders pushed back their expectations for the first interest rate cut by the US Federal Reserve, which is now priced in to happen by December rather than November. Ian Lyngen at BMO Capital Markets warned that “stagflation chatter will surely pick up in the wake of these figures”. US stock markets had already been expected to begin the day lower after Meta revealed plans to increase spending on artificial intelligence (AI) technology, spooking investors seeking returns. The Dow Jones Industrial Average plunged by 1.3pc after the opening bell to 37,977.20 while the S&P 500 fell 1.4pc to...