The Invesco QQQ Trust (QQQ), which tracks the Nasdaq-100 Index, plunged 5% in intraday trading on Thursday, as investors reacted to unexpected inflation data. The sharp decline comes as the latest Consumer Price Index (CPI) report showed inflation easing more than anticipated, potentially complicating the Federal Reserve's monetary policy decisions.

According to the Bureau of Labor Statistics, the CPI fell 0.1% in March, bringing the 12-month inflation rate down to 2.4%. Core inflation, which excludes volatile food and energy prices, increased by just 0.1% for the month, resulting in an annual rate of 2.8% - the lowest since March 2021. This surprising deceleration in inflation has raised concerns among investors that the Federal Reserve might delay or reduce the scope of expected interest rate cuts.

The tech-heavy Nasdaq-100, which the QQQ ETF mirrors, is particularly sensitive to interest rate expectations. Lower inflation typically paves the way for rate cuts, which can boost growth stocks. However, the market's negative reaction suggests that investors may be worried about the underlying economic weakness implied by the rapidly cooling inflation. This uncertainty has led to a sell-off in technology and growth stocks, significantly impacting the QQQ.