Dow posts near 1,300-point drop Tuesday, stocks book worst day since June 2020

U.S. stocks finished sharply lower Tuesday, with all three major indexes posting their worst daily drop since June 2020 as high U.S. inflation has proven hard for the Federal Reserve to tame through rate hikes. The Dow Jones Industrial Average
DJIA,
-3.94%
fell about 1,276 points, or 3.9%, ending near 31,104. The S&P 500 index
SPX,
-4.32%
shed 4.3% and the Nasdaq Composite Index
COMP,
-5.16%
tumbled 5.2%. While off the session’s worst levels, the plunge for stocks still was the worst daily percentage drop for all three indexes since June 11, 2020, according to Dow Jones Market Data. Investors hit the sell button on equities after the August consumer-price index, or CPI, rose 0.1% in August, though the year-over-year rate slowed to 8.3% from 8.5% in July. That was a higher reading than many on Wall Street expected, spurring some to warn the Fed could raise its benchmark policy rate by as much as 1% at its meeting next week, something the central bank hasn’t done since the 1980s.