US stocks plummeted nearly 900 Friday as investor fears spiked after news of a highly-anticipated inflation report revealed that US inflation hit a new 40-year high last month at a rate of 8.6%.
At closing, the Dow Jones Industrial Average index fell by 880 points, marking its steepest loss for the week thus far. The S&P 500 sank by 117 points, and the Nasdaq Composite dove into red territory with a 414-point decline.
Nearly every listing on the 30-stock Dow Jones index tanked as tech giant Apple plummeted some 3.5% and Dow, Inc. sank by 5.6%. E-commerce group Amazon fell over 5% by the time the bell marked closing.
As the two-year Treasury rate surged to its highest level since 2008, Brent crude prices dropped by $1.19 per barrel.
“The concern is that could be a forward indicator of consumer habits and even though gasoline demand is strong now, it’s a sign in the future that if gasoline prices don’t stabilize, then consumers will be cutting back,” Phil Flynn, analyst at Price Futures, told CNBC.
Friday's bleak closing figures came after the markets sharply fell on Thursday as well - the Dow closed with a 638-point dip into the red. Similarly, the S&P 500 declined by 2.38% and the Nasdaq Composite by 2.75%.
The week's numbers were largely impacted by the May consumer price index report that determined prices would rise 8.6% year-over-year, and 6% when excluding energy and food prices. The forecast marks the highest inflation figures since 1981.
“Most people thought inflation had peaked a couple of months ago, and now the fact that we’ve actually even gone higher means people have to readjust, including the Fed,” John Madziyire, senior portfolio manager at Vanguard, informed the Wall Street Journal.
The Federal Reserve is expected to hold its next policy meeting in the coming week, with reports suggesting the US central bank with likely hike interest rates further in a bid to cool price pressures.