Stocks dropped on Friday morning after a highly anticipated inflation report showed a faster-than-expected rise in prices.
The Dow Jones Industrial Average shed 750 points, The S&P 500 fell 2.5%, while Nasdaq Composite sank 3%.
TheMay consumer price index reportcame in at its highest level since 1981, putting pressure on the stock market. The report showed prices rising 8.6% year over year, and 6% when excluding food and energy prices. Economists surveyed by Dow Jones were expecting year over year increases of 8.3% for the main index and 5.9% for the core index.
On a monthly basis, headline CPI was up 1% while core rose 0.6%, compared to respective estimates of 0.7% and 0.5%.
The sell-off was broad, with nearly every member of the 30-stock Dow in the red. Apple dropped 2.9%, while Microsoft and Dow, Inc. fell more than 3%.
The drop for stocks means that Wall Street is headed for yet another losing week. Entering Friday, the Dow was lower by 1.9%, on track for its 10th down week in the past 11. The S&P 500 and Nasdaq Composite were both off by more than 2%, on pace for their ninth losing week in 10.
The hot inflation reading could lead traders to price in more rate hikes from the Federal Reserve later this year. The 2-year Treasury yield, which is seen as one of the most sensitive to Fed rate hikes, jumped above 2.9% on Friday.
Tech stocks were under pressure as investors grappled with higher rates and a potential recession. Shares of Netflix dropped nearly 5% following a downgrade from Goldman Sachs. Chip giant Nvidia slid 4%.
Banks and cyclical stocks also moved lower, possibly reflecting recession fears. Shares of Wells Fargo shed 4%. Boeing dropped 3.6%.
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