STORY: U.S. stocks ended sharply lower on Thursday with a sell-off late in the session, as investors grew cautious ahead of data on Friday that is expected to show that consumer prices remained high in May.
The Dow dropped more than 1.9%, the S&P shed almost 2.4% while the Nasdaq lost over 2.7%.
Loreen Gilbert is CEO of WealthWise Financial Services.
“So there are concerns about the inflation number that’s coming out tomorrow, that it could spike up even higher than it has been. Although consensus is that it stays where it was last month, the month prior. So we’ll see exactly where that goes. But definitely inflation is the headline news, and how much that’s impacting the consumer. And ultimately this summer, with summer travel, with gasoline prices continuing to go up - and even when OPEC indicated more production, we still saw prices going up – and that is certainly a headwind for prices… meaning that the prices could still go higher.”
The data is expected to show that consumer prices rose 0.7% in May, while the core consumer price index, or CPI - which excludes the volatile food and energy sectors - rose 0.5% in the month.
Investors have worried that rising inflation could keep the Federal Reserve on an aggressive path in hiking interest rates.
The central bank has raised its short-term interest rate by three-quarters of a percentage point this year and intends to keep at it with 50 basis points increases at its meeting next week and again in July.
In individual movers, shares of Alibaba Group slid after its affiliate Ant Group said it has no plan to initiate an initial public offering.