Red-Hot Inflation Is Bad News for the Dow

The stock market had a rough day, thanks to a familiar theme: A report showing that inflation remains super-charged has renewed fears that the Federal Reserve will act aggressively to try to tame it, reports CNBC. The benchmark S&P 500 fell 83 points, or 1.8%, to 4,504; the Dow fell 526 points, or 1.4%, to 35,241; and the tech-heavy Nasdaq fared worst of all, falling 304 points, or 2.1%, to 14,185. Illustrating the current volatility of the markets: All three of those indexes were actually in positive territory for part of the day.

“This trend is worrisome for equity markets as it could mean a more aggressive Fed policy response, and that concern will typically pressure equity markets,” Matt Peron of Janus Henderson Investors tells the Wall Street Journal. “We caution that markets could remain choppy for the coming months until either inflation stabilizes or the market is comfortable that the Fed is doing enough, but not too much.” The bad day comes after the S&P had risen seven of the previous 10 trading days, notes the Journal. (More stock market stories.)