DOW plummets 750 points after consumer price index hit a 40-year high, sparking fears of a recession

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Stocks took a drastic dip on Friday morning after the U.S. Labor Department said the consumer prices hit a 40-year high, surging to 8.6% over the last 12 months, faster than April’s year-over-year surge of 8.3%.

On Friday morning, the Dow Jones Industrial Average fell 755 points, or 2.3%. The S&P 500 dropped 2.5%, while Nasdaq Composite sank nearly 3%.

May’s consumer price index report came in at its highest level since 1981, influencing the drop in stock market prices CNBC said.

According to Investors Business Daily, The Consumer Price Index rose 1% from the prior month and 8.6% from a year ago, compared to inflation rates of 8.3% in April and 8.5% in March. The widespread price index excludes volatile food and energy prices.

Peter Earle of the nonpartisan American Institute for Economic Research told Forbes that the report was “very troubling” and that aggressively rising interest rates can risk the country entering a recession.

Banks and cyclical stocks also moved lower, CNBC reported, giving signs of recession fears. Shares of Wells Fargo dropped 4%. Boeing fell 3.6%.

After Friday’s labor report was released, the Associated Press said they anticipate the Federal Reserve to carry out the fastest series of interest rate hikes in three decades. By drastically raising borrowing costs, the Federal Reserve hopes to lessen consumer spending and growth enough to curb inflation without bringing the economy into a recession.