NEW YORK, New York - It was another volatile day on Wall Street on Friday as investors weighed up more bad news on inflation, both in the U.S. and in Europe.
Figures released Friday showed inflation in the Eurozone hitting 10 percent, adding pressure on the European Central Bank to hike interest rates further.
"It's been a tough, tough environment for equities and fixed income both, something that we had expected given our views around the Fed keeping interest rates higher for longer, and markets are starting to come around to that view," Zachary Hill, head of portfolio management at Horizon Investments told CNBC Friday.
"In the near term, we are likely to have continued market volatility with a downward bias as we head into earnings season," Hill added.
The Dow Jones suffered the biggest loss, losing 500.10 points or 1.71 percent, to close Friday at 28,725.51.
The Nasdaq Composite shed 161.89 points or 1.51 percent to 10.575.62.
The Standard and Poor's 500 retreated 54.80 points, or 1.51 percent, to 3,585.67.
The U.S. dollar lost ground except against the commodity currencies which fell sharply as recession fears intensified.
On currency markets, the euro consolidated at 0.9802 following the release of the inflation figure. The British pound also consolidated at higher levels, albeit off its highs above 1.1200. The pound settled at 1.1168 around the New York close Friday. The Japanese yen was little changed at 144.71. The Swiss franc weakened sharply [ly to 0.9860.
The Canadian dollar fell to 1.3818. The Australian dollar eroded sharply to 0.6398. The New Zealand dollar dropped like a stone to 0.5600.
On overseas equity markets, the Dax in Germany surged 1.16 percent. In Paris, France, the CAC 40 rose 1.51 percent. London's FTSE 100 climbed 0.18percent.
In Japan, the Nikkei 225 shed 484.84 points, or 1.83 percent to 25,937.21.
The Australian All Ordinaries crumbled 81.90 points or 1.21 percent to 6,678.70.
In New Zealand, the S&P/NZX 50 dropped 134.33 points or 1.20 percent to 11,065.71.
South Korea's Kospi Composite fell 15.44 points, or 0.71 percent, to 2,153.49.
In China, the Shanghai Composite dived 16.81 points or 0.55 percent to 3,024.39.
Hong Kong's Hang Seng, going against the regional trend, advanced 56.96 points or 0.33 percent to 17,222.83.