Dow skids more than 1,000 points in afternoon trade after August inflation comes in hotter than expected

Stocks tumbled on Tuesday, with the Dow Jones Industrial Average trading down more than 1,000 points, after August inflation came in hotter than expected, underscoring the challenge the Federal Reserve faces in its fight to tame surging prices that have been slow to retreat from a 40-year high. The Dow Jones Industrial Average DJIA, -3.94% fell 1,016 points, or 3.1%, to trade near 31,369, while the S&P 500 index SPX, -4.32% was off 3.5% and the Nasdaq Composite Index COMP, -5.16% was 4.3% lower. The Fed is largely expected to raise its benchmark rate next week by another 75 basis points, and to potentially greenlight a series of bigger rate increases later this fall and winter, which could further pressure stocks and other financial assets, particularly if tighter financial conditions end up tipping the U.S. economy into a recession.