By Yasin Ebrahim

Investing.com – The S&P 500 fell Thursday, wrapping up its worst quarter in two years as investors digested further data pointing to red-hot inflation and President Biden’s plan to release a record amount of emergency oil supplies to curb rising energy prices.

It fell by 1.4%. These three averages fell by approximately 5.2%, 4.8% and 10% for quarter.

Biden stated that the U.S. would release oil daily from its strategic reserves for several months in an effort to curb rising energy prices. In total, up to 180 million barrels are set to be released over six months, which if realized would be largest “release from the stockpile since it was created in 1975,” Stifel said in a note.

Oil prices plunged more than 6% after OPEC, Russia and their allies decided to keep the plans for adding 430,000 barrels daily starting in May. They ignored calls by world leaders to boost production.

The latest economic data point to further evidence of the impact of energy and other commodity prices that have pushed inflation well above the Fed’s 2% target.  

Inflation measure preferred by the Federal Reserve, the price index for personal consumption expenditures (PCE), excluding food, saw the largest gain in 12 months since April 1983.

Wall Street experts believe that the Fed will follow up the 25-basis point rate increase with more aggressive increases later in the year, given the current inflation levels.

Morgan Stanley and JPMorgan are predicting that the Fed will increase rates by 50 basis point in May and June.

Many are concerned about the Fed creating a recession because of their aggressive rate increases. The risk of recession has been priced in by the bond markets. The 10-2 Treasury yield curve temporarily inverted early this week after weeks of flattening.

Bank stocks, which led the weakness on Thursday, remain on course to post a loss for the quarter as flattening in the yield curve dents net interest margin, limiting banks’ profit from lending.

State Street (NYSE:), Signature Bank The biggest droppers on the day were Bank of America (NYSE) and (NASDAQ:). They fell more than 4 percent.

Tech was in the red as well on the last day of the quarter because investors seemed to be taking profits.

Chip stocks were under pressure following a 8% rout in Advanced Micro Devices (NASDAQ:) after Barclays downgraded the chipmaker to underweight from equal-weight cut its price target on the stock to $115 from $148, citing “cyclical risks across several end markets.”

Walgreens Boots Alliance’s (NASDAQ:) earnings fell by 6% due to concerns over slowing growth. However, the quarterly results were strong on both top and bottom. 

This quarter was the worst for stock prices in 2 years. It comes just one day before monthly nonfarm payrolls data, which is expected to indicate that 490,000 new jobs were created in April.