U.S. stocks fall amid inflation fears

New York [US], October 15: U.S. stocks dropped on Friday as investors worried that persistent inflation would force the Federal Reserve to continue aggressive tightening.
The Dow Jones Industrial Average slid 403.89 points, or 1.34 percent, to 29,634.83. The S&P 500 fell 86.84 points, or 2.37 percent, to 3,583.07. The Nasdaq Composite Index shed 327.76 points, or 3.08 percent, to 10,321.39.
All the 11 primary S&P 500 sectors ended in red, with consumer discretionary and energy down 3.88 percent and 3.71 percent, respectively, leading the losses.
The market weakness came after the University of Michigan's preliminary consumer sentiment results for October released on Friday showed an uptick in U.S. inflation expectations.
Consumer expectations for inflation over the next year rose to 5.1 percent from September's one-year low of 4.7 percent, while expectations for inflation over the next five years ticked up to 2.9 percent from 2.7 percent last month, the survey found.
On Thursday, the U.S. Labor Department reported that the country's consumer price index came in hotter than expected in September.
"Inflation remains far too high, the Fed's credibility is at stake, and it will have to keep hiking aggressively until official measures of inflation slow," Mark Haefele, chief investment officer at UBS Global Wealth Management, said in a note on Friday.
"As inflation remains elevated for longer and the Fed hikes further, the risk increases that the cumulative effect of policy tightening pushes the U.S. economy into recession," he said, adding that investors should be prepared for continued market volatility.
The U.S. Commerce Department reported Friday that U.S. retail sales were roughly flat in September as shoppers faced high inflation and rising interest rates.
For the week, the Dow rose 1.2 percent, while the S&P 500 and the Nasdaq fell 1.6 percent and 3.1 percent, respectively.
Source: Xinhua