By Yasin Ebrahim

Investing.com – The S&P 500 fell sharply Thursday after a Federal Reserve official stoked fears of aggressive rate hike action from the central bank, sending Treasury yields soaring just as data showed inflation climbed to multi-decade highs.

It fell 1.9%. The slipped 1.5% or 538 Points, and the Nasdaq fell 2.2%.

St. Louis Fed President James Bullard threw his weight behind the idea of the Fed hiking rates 1% by July,  after consumer price inflation that jumped by a more than expected 7.5% for the 12 months through January.  

“I’d like to see 100 basis points in the bag by July 1,” Bullard said in an interview with Bloomberg. “I was already more hawkish but I have pulled up dramatically what I think the committee should do.” 

Bullard also suggested that he would be in favor of the Fed hiking rates in-between meetings, which caught the market by surprise as it “signals that maybe the Fed is becoming more worried about inflation,” Melissa Brown, managing director of applied research at Qontigo, an index and analytics provider, said in an interview with Investing.com on Thursday.

“The quarter point increase was certainly priced into markets, with Fed futures market implying about a 90% probability recently, but , I’m not sure that half point or more frequent quarter points were priced in,” Brown added.

According to Investing.com’s Fed Monitor Tool, bets on Fed rates increasing by 50 basis points next year jumped to 97.6% from 24% a single day earlier.

For the first time in over two years, the indices jumped by 5% and topped 2%, triggering a wave of fear across stock markets, with tech absorbing the bulk of the risk.

Apple (NASDAQ) and Alphabet (NASDAQ), Meta Platforms, Microsoft (NASDAQ), and Amazon(NASDAQ:) were all a little lower.

The markets did have some good things, though, with the impressive parade of quarterly earnings showing by corporations.

Coca-Cola’s (NYSE:) shares rose 0.8% following fourth-quarter results surpassing Wall Street expectations. But, a lower-than-expected outlook on the future year in light of inflation pressures kept gains from being realized.

PepsiCo, (NASDAQ): also beat the bottom and top lines. But it also expressed concern about the rising cost of inputs for next year. The shares fell nearly 2%.

Walt Disney  (NYSE:), meanwhile, was up more than 3% after reporting better-than-expected quarterly results, underpinned by strong growth in its parks business and upbeat subscriber numbers.

“Management continues to expect that net adds in FY22 will be higher in the second-half vs. the first-half of the year, which potentially suggests upside to consensus estimates, and we see the strong programming slate as justifying another price increase over the coming quarters,” RBC said in a note.

Uber Technologies (NYSE 🙂 fell 5% in spite of better-than expected quarterly results. Ride-hailing companies are promoting the possibility of free cash flow before the end.

In other news, Affirm  (NASDAQ:) stock slipped 19% on Thursday after the company tweeted out its second-quarter results ahead of schedule.