NEW YORK (AP) — Shares fell during morning trading on Wall Street Friday, sending major indices back into the red for the week after several sharp moves both up and down in recent days.
The S&P 500 fell 1.2% as of 10:19 a.m. Eastern. The Dow Jones Industrial Average fell 267 points, or 0.8%, to 33,651 and the Nasdaq fell 1.2%.
Major indices have been shifting between slumps and rallies all week as the latest round of corporate earnings hit the market. Investors have assessed a particularly tough set of financial results from major technology companies, industrial companies and retailers.
The volatile week ends a bleak month for equities as traders worry about the hard drug the Federal Reserve is using in its fight against inflation: higher interest rates. That will increase borrowing costs across the board for people who buy cars, use credit cards and take out mortgages to buy homes. The S&P 500 is on track for a 6.7% loss for April, which would be the worst month since the start of the pandemic.
Internet retail giant Amazon fell 11.7% after reporting a rare quarterly loss and giving investors a disappointing revenue forecast. Amazon’s weak update comes as Wall Street worries about a possible slowdown in consumer spending and rising inflation.
Prices for everything from food to gas have risen as the economy recovers from the pandemic, and there is a wide gap between increased demand and lagging supply. Russian invasion of Ukraine has only heightened inflation worries as it fuels price hikes for oil, natural gas, wheat and corn.
The Commerce Department reported Friday that an inflation gauge closely monitored by the Federal Reserve rose 6.6% in March compared to a year ago, the 12-month jump in four decades and further evidence that rising prices are straining household budgets and the health of the economy.
The latest report on rising US inflation follows a report by the Eurostat statistics agency that showed inflation reached a record high of 7.5% in April. for the 19 countries that use the euro.
Bond yields rose as a result of high inflation rates. The return on the 10-year Treasury rose from 2.85% to 2.88%.
Continued rising inflation has prompted central banks to raise interest rates to mitigate the impact on businesses and consumers. The Fed plans to raise interest rates aggressively as it ramps up its fight against inflation. The Fed chairman has indicated that the central bank could raise short-term interest rates by double during upcoming meetings, starting next week. It has already increased its main overnight money rate once, the first increase since 2018.