Stocks fell sharply on Tuesday after a key August inflation report came in hotter than expected, hurting investor optimism for cooling prices and a less aggressive Federal Reserve.
The Dow Jones Industrials continued its downward journey, losing 888.12 points, or 2.7%, by noon hour at 31,493.22
The S&P 500 let go of 128.36 points, or 3.1%, to 3,982.05.
The NASDAQ Composite fell back 493.59 points, or 4%, to 11,772.82.
More than 480 stocks in the S&P 500 fell, with Facebook-parent Meta dropping 7.6% and Caesars Entertainment losing 6.7%.
The selloff was particularly painful in high-growth tech stocks. Cloudflare fell about 10%, while Unity Software sank more than 11%. Shares of direct-to-consumer auto retailer Carvana slid more than 12%, making it one of the worst performers on the New York Stock Exchange.
The August consumer price index report showed a higher-than-expected reading for inflation. Headline inflation rose 0.1% month over month, even with falling gas prices. Core inflation rose 0.6% month over month. On a year-over-year basis, inflation was 8.3%.
Economists surveyed by Dow Jones had been expecting a decline of 0.1% for overall inflation, with a rise of 0.3% for core inflation.
The report is one of the last the Fed will see ahead of its Sept. 20-21 meeting, where the central bank is expected to deliver their third consecutive 0.75-percentage-point interest rate hike to tamp down inflation. The unexpectedly high August report could lead the Fed to continue its aggressive hikes longer than some investors anticipated.
Treasury prices fell hard Tuesday, raising yields to 3.43% from Monday's 3.35%. Treasury prices and yields move in opposite direction.
Oil prices stumbled 88 cents to $86.90 U.S. a barrel.
Gold prices sank $25.00 to $1,715.60 U.S. an ounce.