US Stocks Plummet as Inflation Fears Reach Fever Pitch

The US stock market declined as investors grew increasingly concerned about inflationary pressures, driven by rising oil prices and a jump in business activity. The S&P 500 fell from near-record levels, with Brent crude settling at around $103 per barrel, fueling bets that the Federal Reserve will continue to boost interest rates.

The Treasury Department's weak sale of five-year notes sent bond yields soaring to nearly two-decade highs, deepening a selloff in Treasuries. The dollar climbed against major currencies as investors sought safe-haven assets.

Manufacturing and services saw a pickup in new orders and output this month, raising concerns about overheating activity. Fed governor Michael Barr stated that further tightening is likely needed to return inflation to target levels. Money markets fully reflect three hikes over the next year, with significant hedging for a fourth increase.