Amazon leads way down as S&P drops

Investors keep watch on Fed after inflation gauge surges

Internet retail giant Amazon slumped 14 percent on Friday, one of the biggest decliners in the S&P 500, a day after reporting a rare quarterly loss and giving investors a disappointing revenue forecast.

The weak update from Amazon comes as Wall Street worries about a potential slowdown in consumer spending with rising inflation.

The S&P 500 fell 155.57 points to 4,131.93 Friday. The Dow dropped 939.18 points to 32,977.21. The Nasdaq slid 536.89 points to 12,334.64. It’s down

21.2 percent this year.

Smaller company stocks also had a rough day. The Russell 2000 slid 53.84 points, or 2.8 percent, to 1,864.10.

The Commerce Department on Friday reported that an inflation gauge tracked by the Federal Reserve surged 6.6 percent in March compared with a year ago, the highest 12-month jump in four decades and further evidence that spiking prices are pressuring household budgets and the health of the economy.

The latest report on rising U.S. inflation follows a report from statistics agency Eurostat that shows inflation hit a record high in April of 7.5 percent for the 19 countries that use the euro.

Bond yields rose following the hot readings on inflation.

The yield on the 10-year Treasury rose to 2.92 percent from 2.85 percent.

Persistently rising inflation has prompted central banks to raise interest rates to temper the impact on businesses and consumers.

Much of the anxiety on Wall Street in April has centered around how quickly the Fed will raise its benchmark interest rate and whether an aggressive series of hikes will crimp economic growth.

The chair of the Fed has indicated the central bank may raise short-term interest rates by double the usual amount at upcoming meetings, starting next week.

It has raised its key overnight rate once, the first such increase since 2018, and Wall Street is expecting several big increases over the coming months.

Investors spent much of April shifting money away from Big Tech companies, whose stock values benefit from low interest rates, to areas considered less risky.

The S&P 500’s consumer staples sector, which includes many household and personal goods makers, was the only sector in the benchmark index to make gains in April.