At the close of trade, the Dow Jones Industrial Average index stumbled 336.99 points, or 1.02%, to 32,816.92. The S&P500 index was down 42.28 points, or 1.05%, to 3,970.04. The tech-heavy Nasdaq Composite Index declined 195.46 points, or 1.69%, to 11,394.94. For the week, the S&P 500 was down 2.7%, the Dow fell almost 3%, and the Nasdaq closed 3.3% lower.
Total 9 of 11 sectors ended lower along with the S&P500 Index. Real estate was the worst performing sector, falling 1.82%, followed by Information technology (down 1.77%), consumer discretionary 9down 1.56%) and communication services (down 1.43%). Material was top performing sector, rising 0.65%.
Commerce Department data showed that personal consumption expenditures (PCE) price index, the Fed's preferred inflation measure, accelerated by 0.6% in January, faster than the 0.2% gain in December. On an annual basis, PCE rose to 5.4% in January from a 5.3% gain in December. Core prices, stripping out fuel and food, rose 0.6% and 4.7% for the month and year , respectively.
Hotter-than-expected inflation could encourage the Fed to keep interest rates higher for longer. The market expects the central bank to raise rates by a quarter of a percentage point in March and again in May. The policy rate is expected to reach 5.36% by mid-summer and could remain elevated for the rest of 2023.
In corporate news, Boeing shares slipped more than 4% after the company temporarily halted delivery of its 787 Dreamliners following new issues with a fuselage component.
Adobe shares closed lower after reports that the Justice Department is preparing an antitrust lawsuit seeking to block the company's $20 billion acquisition of startup Figma.
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