Dow Plunges 500 Points As ‘Market Anxiety’ Returns After Latest Inflation Surge

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Dow Plunges 500 Points As ‘Market Anxiety’ Returns After Latest Inflation Surge
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The stock market plunged on Thursday after a worse-than-expected inflation reading—with consumer prices spiking 7.5% in January—raised investor concerns that the Federal Reserve could tighten monetary policy too quickly and send markets into a tailspin.

The red-hot inflation data also sent government bond yields surging higher: The ten-year Treasury note briefly jumped above 2% on Thursday, its highest level since August 2019 and up from 1.5% in December.

Big Tech and other growth stocks came under pressure following the inflation data, with shares of Amazon and Microsoft each down 1% or more, while shares of bank stocks rose on the prospect of higher interest rates. Solid earnings reports from several companies helped limit the market’s downside, however: Entertainment giant Disney rose over 3% and soft drink maker Coca Cola nearly 1%.“With another surprise jump in inflation in January, markets continue to be concerned about an aggressive Fed,” says Barry Gilbert, asset allocation strategist for LPL Financial.

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