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Business & Economy

Business & Economy

The Big Story

Stocks plummet after hot inflation report

Stocks ended the week with steep losses after new federal data showed prices rising faster than expected, reigniting inflation fears on Wall Street.

© AP Photo/Seth Wenig

The Dow Jones Industrial Average lost more than 715 points on the day, falling 1.7 percent. The Nasdaq composite lost 2.7 percent and the S&P 500 index fell 2 percent.

The stock slide began shortly after the Commerce Department released data showing an unexpectedly steep increase in consumer prices.

The personal consumption expenditures (PCE) price index rose 2.5 percent over the past year, but 2.8 percent without food and energy prices included. On a monthly basis, the PCE index advanced by 0.3 percent while core PCE increased by 0.4 percent.

"We are moving in the wrong direction and the concern is that tariffs threaten higher prices, which mean the inflation prints are going to remain hot. This will constrain the Fed’s ability to deliver further interest rate cuts," said James Knightley, chief international economist at AIG, in a Friday analysis.

Read the full report at TheHill.com.

Welcome to The Hill’s Business & Economy newsletter, I'm Aris Folley — covering the intersection of Wall Street and Pennsylvania Avenue.

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