Wall Street falls as inflation data fuels rate hike fears; Dow tumbles 1%

Wall Street’s main indexes slid on Wednesday after hotter-than-expected inflation data fanned fears that the Federal Reserve might take a more aggressive stance on interest rate hikes, potentially tipping the economy into a recession.

Surging prices globally are driving central banks to raise borrowing costs this year, triggering concerns that a reversal of decades-long easy-money policies could lead to a sharp economic downturn.

The benchmark S&P 500 was set to reverse its gains in July after recording its worst first-half performance since 1970.

U.S. consumer prices accelerated in June as gasoline and food costs remained elevated, data showed, resulting in the largest annual increase in inflation in 40-1/2 years and cementing the case for the Fed to hike interest rates by 75 basis points later this month.