US Stock Market Plunges as Inflation Fears Intensify

The US stock market declined sharply on Friday as investors became increasingly anxious about inflation and rate hikes. The S&P 500 dropped 1.2%, while the Nasdaq fell 1.5% and the Dow Jones decreased by 1.1%. This was the worst day for the Russell 2000, which tracks small-cap stocks, in over a year.

The Federal Reserve Bank of Philadelphia's Survey of Professional Forecasters showed that US consumer price inflation is projected to reach 6% in the first quarter, up from an earlier estimate of 2.7%. This was despite a slight dip in the past three months due to global events. The forecast for full-year inflation also increased to 3.5% for all items and 2.9% for core prices.

The rise in bond yields, which topped 4.5%, has led investors to worry about rate hikes amid higher oil prices. This trend is affecting stocks across the board, with tech shares being particularly hard hit. Angelo Kourkafas from Edward Jones noted that 'risk sentiment is being dented by a global rise in bond yields'.

Among individual stocks, Tesla (TSLA) dropped 4%, while Microsoft (MSFT) saw its stock rise due to the acquisition of a new stake by billionaire hedge fund manager Bill Ackman. The company's recent job cuts and plans for capital raising were also major concerns for investors.