The U.S. dollar went up sharply.
The May Consumer Price Index CPI rose to 8.60 percent year-on-year, much higher than analysts had predicted. This was the highest monthly figure since December 1981. Core inflation, excluding food and energy prices, was 6 percent higher than anticipated.
Lori Calvasina, head of U.S. equity strategy at RBC Capital Markets, told CNBC that it confirmed some of the fears I've heard from investors this week.
Does it force equities to stay at the bottom of the range it's been in? Calvasina cautioned that this isn't enough to force it down to new lows.
The Dow Jones industrials plunged 886.16 points, or 2.73 percent, to 31,391. The Nasdaq Composite fell 414.20 points or 3.52 percent to 11,340. The Standard and Poor's 500 fell 117.09 points or 2.91 percent to 3,900. The U.S. dollar was bought up across the board on foreign exchange markets. The euro dropped to 1.0521 by New York on Friday. The British pound fell to 1.2311 on the back of a 1.2311 drop. The Japanese yen was steady, trading at multi-decade lows around 134.38. The Swiss franc plunged to 0.9881.
The Australian dollar dropped to 0.7053. The New Zealand dollar fell to 0.6359.
The FTSE 100 was down 2.12 percent in London. The German Dax lost a significant 3.08 percent, while the CAC 40 was off 2.69 percent in Paris, France.
In Japan, the Nikkei 225 fell 422.24 points or 1.49 percent to 27,824. The Australian All Ordinaries fell 95.20 points or 1.31 percent to 7,145. In New Zealand, the S&P NZX 50 declined by 75.03 points or 0.67 percent to 11,136. The Shanghai Composite gained 45.88 points or 1.42 percent to close Friday at 3,284.