The CPI report must have been released fairly early because it was just a calamitous straight shot down right out the gate and it stayed that way all day for all three indexes to have their greatest weekly loss since January. You can guess that the report was not at all good. Economists had forecasted that the increase in inflation in May would be double that of April; instead it was triple. The forecast was for a 0.7% increase (vs April 0.3%) for May and instead it came in at a whopping 1%, nearly 50% above the estimate. Year-on-year CPI went to 8.6% in May, the biggest in 41 years, following 8.3% in April. So inflation, which was expected to be pretty bad, turned out to be much worse thereby extinguishing hopes for a pause in rate increases in the fall.  The S&P is down 18.2% for the year, 5% of that just this week.  With fears of more rate hikes also came fears of recession.  After going a while of volume being below recent averages, today it was above at 12.6 billion. 

Fri  June 10, 2022  5:01 PM

Wall St suffers biggest weekly loss since January after hot CPI data

By Caroline Valetkevitch

DJ: 32,272.79  -638.11        NAS: 11,754.23  -332.05        S&P: 4,017.82  -97.95      6/9

DJ: 31,392.79  -880.00        NAS:11,340.02  -414.20         S&P: 3,900.86  -116.96    6/10

NEW YORK, June 10 (Reuters) - U.S. stocks posted their biggest weekly percentage declines since January and ended sharply lower on the day Friday as a steeper-than-expected rise in U.S. consumer prices in May fueled fears of more aggressive interest rate hikes by the Federal Reserve.  Tech and growth stocks, whose valuations rely more heavily on future cash flows, led the decline. Microsoft Corp (MSFT.O), Amazon.com Inc (AMZN.O) and Apple Inc (AAPL.O) drove losses in the S&P 500.  Following the inflation report, two-year Treasury yields , which are highly sensitive to rate hikes, spiked to 3.057%, the highest since June 2008. Benchmark 10-year yields reached 3.178%, the highest since May 9.

The U.S. Labor Department's report showed the consumer price index (CPI) increased 1.0% last month after gaining 0.3% in April. Economists polled by Reuters had forecast the monthly CPI picking up 0.7%.  Year-on-year, CPI surged 8.6%, its biggest gain since 1981 and following an 8.3% jump in May. read more

Stocks have been volatile this year, and recent selling has largely been tied to worries over inflation, rising interest rates and the likelihood of a recession.  "Today's report should extinguish any pretense that a 'pause' in rate hikes will likely be appropriate by the end of summer, as the Fed is clearly still behind the eight ball on bringing inflation under control," said Jason Pride, chief investment officer for private wealth at Glenmede in Philadelphia.

The Dow Jones Industrial Average (.DJI) fell 880 points, or 2.73%, to 31,392.79; the S&P 500 (.SPX) lost 116.96 points, or 2.91%, to 3,900.86; and the Nasdaq Composite (.IXIC) dropped 414.20 points, or 3.52%, to 11,340.02.  The major indexes registered their biggest weekly percentage drops since the week ended Jan. 21, with the Dow down 4.58%, the S&P 500 down 5.06% and the Nasdaq down 5.60% for the week.  The S&P 500 is now down 18.2% for the year so far.  On Friday, the S&P 500 growth index (.IGX) took a 3.7% hit, while the value index (.IVX) fell 2.2%.

The inflation report was published ahead of an anticipated second 50 basis points rate hike from the Fed on Wednesday. A further half-percentage-point is priced in for July, with a strong chance of a similar move in September.  One worry is that an aggressive push higher on rates by the Fed could send the economy into recession. read more  Among the day's losers, Netflix Inc (NFLX.O) slid 5.1% after Goldman downgraded the streaming video giant's stock to "sell" from "neutral" due to a possibly weaker macro environment.

Declining issues outnumbered advancing ones on the NYSE by a 5.70-to-1 ratio; on Nasdaq, a 4.05-to-1 ratio favored decliners.  The S&P 500 posted one new 52-week high and 44 new lows; the Nasdaq Composite recorded 17 new highs and 326 new lows.

Volume on U.S. exchanges was 12.62 billion shares, compared with the 11.88 billion average for the full session over the last 20 trading days.