NEW YORK, Feb. 16 (Xinhua) -- Wall Street's major averages fell sharply on Thursday as U.S. economic data fueled fears of more rate hikes.
The Dow Jones Industrial Average dropped 431.20 points, or 1.26 percent, to 33,696.85. The S&P 500 sank 57.19 points, or 1.38 percent, to 4,090.41. The Nasdaq Composite Index shed 214.76 points, or 1.78 percent, to 11,855.83.
All the 11 primary S&P 500 sectors ended in red, with consumer discretionary and technology down 2.16 percent and 1.75 percent, respectively, leading the slide.
The Cboe Volatility Index, widely considered as the best fear gauge in the stock market, spiked 10.64 percent to 20.17.
The market sell-off came as recent U.S. economic data cemented the chances that the Federal Reserve will keep raising interest rates to tame inflation.
The U.S. Labor Department reported Thursday that the country's producer price index, a measure of inflation from the viewpoint of industry and business, jumped 0.7 percent in January, its biggest increase since last June and well above the 0.4 percent consensus.
Additionally, the number of Americans filing new claims for unemployment benefits decreased by 1,000 to 194,000 for the week ending Feb. 11, signaling the U.S. labor market is still quite tight. Economists polled by The Wall Street Journal had forecast that new claims would total 200,000.
The above data followed a strong January U.S. retail sales report on Wednesday and hotter-than-expected consumer inflation readings on Tuesday.
The latest data added to the risk that the Fed may have to do more to ease price pressures, according to analysts.
The Fed has raised its policy rate by 450 basis points since last March from near zero to a range of 4.5 percent to 4.75 percent. Top Fed officials have stressed that more needs to be done to curb inflation.
St. Louis Fed President James Bullard said Thursday that he pushed for a higher interest rate increase at the last meeting and could see a more aggressive move ahead.
Cleveland Fed President Loretta Mester also said Thursday she supported a larger increase than the quarter-point approved by the Federal Open Market Committee (FOMC).
Earlier in the week on Tuesday, New York Fed President John Williams said the Fed still has a way to go to get inflation back down to its 2 percent target.
Dallas Fed President Lorie Logan said that the central bank must remain prepared to continue rate increases for a longer period than previously anticipated.
"We do expect an inflection point in inflation, monetary policy, and market sentiment in 2023. However, the latest data suggest it is too early to expect a dovish pivot from the Fed," UBS analysts said.
"With the next FOMC meeting taking place on 21-22 March, it's unlikely it will have sufficient reasons by then to stop hiking rates," they said, adding "we continue to see headwinds for the broad U.S. equity market in the near term." ■
