Investors have worried that rising inflation could have an impact on the outlook for monetary policy ahead of the Federal Reserve's decision on interest rates next Wednesday. Traders are baking in half-point increases through September and are piling into bets for a potential 75-basis-point hike in the coming months.
At the close of trade, the Dow Jones Industrial Average index tumbled by 880 points, or 2.73%, to 31,392.79. The S&P500 index fell by 116.96 points, or 2.91%, to 3,900.86. The tech-heavy Nasdaq Composite Index dropped 414.20 points, or 3.52%, to 11,340.02. For the week, the Dow dropped 4.6%, the S&P 500 slid 5.1% and the Nasdaq tumbled 5.6%.
All 11 major S&P sectors ended the session red, with consumer discretionary (down 4.2%), information technology (down 3.9%), financials (down 3.65%), industrials (down 3%), and materials (down 3%) issues suffered the largest percentage losses.
ECONOMIC NEWS: The Labor Department released a report showing consumer prices in the U.S. shot up by more than expected 1% in May after rising by 0.3% in April. With the bigger than expected monthly increase, the annual rate of consumer price growth accelerated to 8.6% in May from 8.3% in April, showing the biggest surge since December 1981. Meanwhile, the annual rate of core consumer price growth slowed to 6.0% in May from 6.2% in April.
The University of Michigan's gauge of consumer sentiment fell sharply to a record low reading of 50.2, down from a May reading of 58.4.
Among Indian ADR, WNS Holdings fell 1.43% to $71.64, Azure Power Global dropped 5.4% to $13.78, Tata Motors fell 1.84% to $26.65, and INFOSYS sank 2.9% to $18.33. Wipro fell 3.2% to $5.70, ICICI Bank fell 3% to $17.90, and HDFC Bank fell 4.5% to $55.37. Dr Reddy's Labs added 0.6% to $55.14.
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