The stock market closed the week on a sour note after U.S. inflation accelerated to a fresh 40-year high and consumer sentiment plunged to a record low.
Friday’s selloff was broad, with all 30 Dow stocks closing lower and decliners outnumbering advancers on the New York Stock Exchange by 8 to 1. The hot inflation numbers, which showed inflation soaring 8.6% on an annualized rate, sparked heightened concerns about a recession and more aggressive interest rate policy from the Federal Reserve starting at next week’s meeting.
The 2-year Treasury yield, considered highly sensitive to Fed rate hikes, spiked 22 basis points to 3.04%, its highest level since 2008. For the week, it was the worst showing for stocks since January, with the Dow diving 4.6%, the S&P 500 shedding 5% and the tech-heavy Nasdaq Composite plunging 5.6%.