NEW YORK, June 13 (Xinhua) -- Wall Street experienced another painful session on Monday, with the S&P 500 ending in bear market territory, as investors' fears for a recession heightened.
The S&P 500 fell 151.23 points, or 3.88 percent, to 3,749.63. The decline brought the S&P 500 to drop more than 21 percent from its January record, confirming a bear market for the benchmark. A bear market is commonly defined by a fall of at least 20 percent from a recent peak.
The Dow tumbled 876.05 points, or 2.79 percent, to 30,516.74. The tech-heavy Nasdaq shed 530.79 points, or 4.68 percent, to 10,809.23.
Monday's sell-off was wild and broad with all the 11 primary S&P 500 sectors finishing noticeably lower.
The Cboe Volatility Index, widely considered as the best fear gauge in the stock market, spiked 22.59 percent to 34.02.
The above market reactions came after data showed U.S. consumer price index rose by 1.0 percent in May, bringing the inflation rate to 8.6 percent year-over-year, the highest since 1981.
The report defied widespread consumption that the annual rate of inflation had peaked in March, raising worries about the Federal Reserve's ability to cool prices without sparking a recession.
"With inflation now at a new 41-year high, recession fears instantly grew," Kevin Matras, executive vice president at Zacks Investment Research, said Monday in a note.
"Inflation is really really bad," and investors grew concerned about more aggressive Fed tightening and the potential impact on the growth outlook, Larry Benedict, CEO & founder of The Opportunistic Trader, a U.S. market research firm, told Xinhua.
Surging inflation increased risks of a recession, as the Fed may have to take greater measures to tackle it, according to experts.
"The higher than expected inflation data will keep pressure on the Fed," and it "undermined hopes for a slowdown in Fed rate hikes later this year," analysts at UBS said in a note.
"Markets are continuing to scale up their expectations of the degree of tightening that the Fed will enact this year," they added.
The Fed will kick off its two-day policy meeting on Tuesday with a rate decision on Wednesday.
In May, the Fed increased the rate by half a percentage point and has signaled more half-point hikes going forward.
While reiterating last month the Fed's commitment to getting inflation under control, Chairman Jerome Powell said that he couldn't promise a so-called soft landing for the economy.
As uncertainty remains regarding the macroeconomic outlook, experts cautioned that investors should be prepared for continued volatility.
"The market sentiment is very, very shaky ... I do think there's a lot more pain to come," warned Benedict.
"Volatility is likely to remain high over the coming days, as investors consider the potential need to recalibrate their assumptions based on the Fed's decisions," said UBS analysts.
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