Bank of America warns Wall Street stock pickers remain vulnerable to an inflation shock – and recommends 2 trades for protection as prices rise

• Inflation rose more than expected in April, spooking investors.
• Bank of America’s Savita Subramanian says active managers are ill-prepared for it.
• She shared two trades for an inflationary environment.

Investors are getting a strong dose of inflation fears this week, as the consumer price index (CPI) – a key measure of inflation – jumped more than expected in April.

Prices rose by 4.2% from last April, and by 0.8% from March, both higher than economists were anticipating.

Stocks were down big because of the surprise. The Dow had its biggest daily drop since January, while the S&P 500 fell by as much as 3.4% and the tech-heavy Nasdaq was down by more than 4%.