Dow drops 349 points after high inflation data

• US stocks fell on Friday after key inflation numbers came in higher than expected.
• The core PCE, the central bank’s preferred measure of inflation, rose 0.6% in January, higher than economists’ estimates.
• Bond yields rose, with the 10-year Treasury rising eight basis points to 3.96%.

US stocks fell Friday as investors braced for a more aggressive Federal Reserve after key January inflation data came in higher than expected.

Data on core spending on personal consumption, the central bank’s favorite inflation measure, rose 0.6% from a month earlier, above economists’ estimates and the highest since June.

The S&P 500, Nasdaq Composite and Dow Jones Industrial Average were all headed for a losing week after swinging between gains and losses over the past few trading sessions. The S&P 500 is heading for its worst week since mid-December.

Treasury yields soared, with two-year yields reaching 4.79%, the highest level since 2007. Ten-year yields rose eight basis points to 3.96%

“We have an extremely difficult economy to read,” said former Treasury Secretary Larry Summers. “People may read a little too much into the moment in terms of economic strength relative to the way things could look very different in a quarter or two.”

Here’s where the US indices were open at 9:30am ET on Friday:

Here’s what else happened today:

• Former Treasury Secretary Larry Summers outlined four worrying signs that indicate why the U.S. economy may be closing in on the brink, he told Bloomberg.
• Tesla boss Elon Musk reiterated his view that central bank tightening could destroy the value of the entire stock market. “A bad decision by the Fed affects everyone’s life,” he tweeted.
• In a flurry of tweets this week, top economist David Rosenberg unleashed hope that the US economy could escape recession, adding that Wall Street is lying about a “no landing” scenario.
• These four charts show how Putin’s war in Ukraine has changed the oil and gas landscape.