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Yields Spike to 2008 High, Stocks Sink on Fed Bets: Markets Wrap

  • Treasury yields soar as CPI of 8.6% surges past estimates
  • Hot reading pressures Fed to hike 50 basis points in September
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Morgan Stanley's Skelly Sees Market Downside Limit at 5%-10%Source: Bloomberg
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US stocks tumbled the most in three weeks and Treasury yields spiked higher after an unexpectedly hot reading in consumer prices fueled bets the Federal Reserve will have to step up its battle against inflation.

The S&P 500 fell 2.9%, closing out the second worst week this year and the ninth weekly drop in the past 10, as fears mounted that efforts to combat inflation risk stifling growth. Tech shares bore the brunt of Friday’s rout, with the Nasdaq 100 tumbling more than 3%. Growth stocks from Cathie Wood’s flagship ETF to software developers and chipmakers plunged. A separate report showed US consumer sentiment dropped in early June to a record, adding to pressure on shares of airlines, casinos and hotels.