After Inflation Report, Markets Anticipate Aggressive Fed Response, Deeper Economic Recession

Trader James MacGilvray works on the floor of New York Stock Exchange on May 16, 2022. Courtney Crow/New York Stock Exchange via AP

U.S. financial markets are bracing for a more aggressive Federal Reserve and a deeper economic downturn following the latest inflation data.

The Dow Jones Industrial Average plunged by more than 800 points, the S&P 500 dropped by nearly 3 percent, and the Nasdaq Composite Index plummeted by more than 400 points.