Stocks sink as report shows record-high inflation

STORY: U.S. stocks plunged on Friday, posting their biggest weekly percentage declines since January, after the Labor Department's consumer price index report showed a steeper-than-expected rise in May, feeding investor fears that the Federal Reserve might take more drastic action to fight inflation.

The Dow ended down about two and three quarters of a percent. The S&P 500 fell nearly 3%, while the Nasdaq finished down more than 3.5%.

Chris Konstantinos is chief investment strategist at RiverFront Investment Group.

"We got this huge CPI print this morning, 8.6% headline CPI rate of inflation, which obviously is very concerning for anyone who was hoping that the Federal Reserve's bark might be a little bit worse than their bite as it relates to interest rate hikes. I think this number really has to take that off the table... At the end of the day, I don't think you're really going to get to see a whole lot of relief on the inflation side anytime soon."

Tech and growth stocks led the decline on Friday, with Microsoft and Apple among the biggest weights on the S&P 500 and Nasdaq.

Netflix slid 5% after Goldman Sachs downgraded the streaming giant's stock to "sell" from "neutral," citing risks of slower consumer spending.

All three major airline stocks plummeted after Friday's inflation report, as investors worried higher fares could lead to a falloff in demand.

All eyes are now on the Federal Reserve's meeting next Wednesday, when the U.S. central bank is expected to announce a second 50-basis-point interest rate hike.