As the Federal Reserve’s preferred inflation index revealed a stronger-than-anticipated increase in prices last month, U.S. stock futures plunged Friday.
Futures for the Dow Jones Industrial Average dropped 366 points, or 1.6%. Futures for the S&P 500 and Nasdaq 100 fell 1.2% and 1.7%, respectively.
The Fed’s favored inflation gauge, the core personal consumption expenditures price index, increased by 0.6% in January and 4.7% from the previous year, above economists’ predictions.
The news added to worries that the Fed may have to maintain rates higher for longer to tame inflationary pressures.
“We’re still staring down the barrel of a gun that hasn’t grasped what the consumer may or may not have strength for in the next months, and what earnings will do in the coming months. Liz Young from SoFi commented on the stock market’s “overconfidence” on Thursday’s “Halftime Report” on CNBC
A dismal week is expected for the major averages. By Thursday, the S&P 500 was down 1.64%, and it is projected to have its worst week since December 16. The Dow is set for its fourth consecutive losing week as it is down about 1.99% this week. The Nasdaq is down 1.67% and is expected to have its second down week in three weeks.
After Boeing temporarily stopped shipping its 787 Dreamliners due to a fuselage issue, its shares fell more than 2%.