Stocks fell Friday morning after a highly anticipated inflation report showed prices rising faster than expected, contrary to market hopes for a decline due to tightening measures adopted by the US Federal Reserve since early 2022.

The Dow Jones Industrial Average dropped 755 points or 2.3 percent. The S&P 500 fell by 2.5%, while the Nasdaq Composite declined by nearly 3%.

The highest in 41 years

The Consumer Price Index report for May came in at its highest level since 1981, putting pressure on the stock market. The report showed prices rising 8.6% year-over-year, and 6% excluding food and energy prices.

Economists surveyed by Dow Jones expected annual increases of 8.3% for the headline index and 5.9% for the core index.

Hot inflation raised concerns about a potential recession for the US economy. Elsewhere, the preliminary June reading of the University of Michigan Consumer Sentiment Index was much lower than expected, recording a record decline.

Massive sell-offs

Sell-offs were widespread, with every member of the 30-stock Dow Jones index in the red. Apple shares (NASDAQ:AAPL) fell 2.9%, while Microsoft shares (NASDAQ:MSFT) and the Dow dropped more than 3%.

Falling stocks mean Wall Street is headed for another week of losses. Entering Friday, the Dow was down 1.9%, on track for its tenth down week in the past 11. Both the S&P 500 and Nasdaq Composite dipped more than 2%, pacing for their ninth losing week in 10.

The Fed has no other choice

The hot inflation reading may push traders to expect interest rate hikes from the Federal Reserve later this year. The two-year Treasury yield, seen as one of the most sensitive rates to Fed rate hikes, jumped above 2.9% on Friday.

Technology stocks came under pressure as investors grappled with rising interest rates and a potential recession. Netflix shares fell nearly 5% after Goldman Sachs (NYSE:GS) downgraded the rating. The giant Nvidia chip slipped 4%.

Bank stocks and cyclical shares also fell, possibly reflecting recession fears. Wells Fargo shares dropped 4%. Boeing (NYSE:BA) shares fell 3.6%.

Cryptocurrencies caught in the fall fire

No surprise that cryptocurrencies are down; they have failed to rise during extended weeks since reaching a peak last November. Bitcoin fell below the $30,000 mark following US unemployment data, now down 2.83% trading at $29,429.

Meanwhile, Ethereum also dropped to $1,733.48, losing 3.44% today.

Total crypto market capitalization reached $1.20 trillion today, with crypto market cap down 2.7% today.

Market trends have shifted several times but have now settled on a rise in all safe havens and wide declines in energy commodities, US stocks, and cryptocurrencies.

Most major currencies declined against the dollar, while the Russian ruble managed to rise 4.5% against it after the Russian interest rates were cut to 9.5%, returning to pre-war levels.

Both gold and the US dollar index rose over 1%, with the dollar index registering 104.192 against a basket of foreign currencies, while gold climbed 1.3% to trade at $1,872 an ounce.

At the same time, the US 10-year Treasury yields rose to 3.171%, an increase of 4.22%.

US market indices are currently falling, with Nasdaq testing a 3.4% decline, losing 396 points; the Dow Jones fell 2.5%, losing 833 points; and the S&P 500 dropped 2.7%, losing 113 points.