The Novonix Ltd (ASX: NVX) share price is on the back foot in Wednesday morning trade.
Amid a massacre on the market, shares in the battery technology company are trading 7.82% lower to $2.24. Meanwhile, the S&P/ASX 200 Index (ASX: XJO) is taking a bath, sporting a 2.7% decline in the early hours.
Without a shred of developments from Novonix directly today, we must turn to the bigger picture.
Inflation data brings more pain
The reality is the Novonix share price is not alone on a day like today. To paint the picture of the bleak sentiment on Wednesday, only three ASX shares out of the 200 are not in the negative.
It's fair to say that investors are selling across the board following the release of the latest consumer price index (CPI) data in the United States overnight. According to the data, the index increased 0.1% month on month, bringing the increase over the last year to 8.3%.
Unfortunately, market pundits were forecasting a relief from inflation growth. Heading into the announcement, the general expectation was for a 0.1% decline month on month. In turn, the US market — including Nasdaq-listed Novonix share price — took the foot off the gas last night.
At the time of writing, ASX tech shares are feeling the sharp sting of inflation the most. While there isn't a single sector in the green, the tech segment is bleeding a horrific 3.47% so far today.
When it comes to the likes of Novonix shares, investors tend to become extra cautious of unprofitable companies in light of high inflation data. This reaction is due to the high likelihood of further interest rate increases by central banks to stifle inflation.
As shown above, bond markets are now pricing in more dramatic rate increases over future months. As a result, investors will be less inclined to invest in riskier assets if cash rates are attractive.
Where has the Novonix share price been?
Today's tumble in the Novonix share price only adds to what has been a difficult year. The theme of rising rates and cost of capital has hit the battery technology company like a wrecking ball.
Since the beginning of 2022, Nonovix shares have experienced a 75.6% ride to the downside. Remarkably, in the past year, the company once traded as high as $12.47 — now a distant memory.
