U.S. stocks fell sharply Friday, with the Dow Jones industrial average experiencing its worst weekly percentage drop in two years.
The Dow dropped nearly 666 points, or 2.5 percent, just two weeks after it surpassed the 26,000-mark for the first time.
Investors said the drop was partly due to fears of rising inflation, which could lead to an increase in interest rates in the coming months.
“We’ve enjoyed low interest rates for so long, we’re having to deal with a little bit higher rates now, so the market is trying to figure out what that could mean for inflation,” Darrell Cronk, the president of the Wells Fargo Investment Institute, told the Associated Press.
Fears about inflation were stoked by the stronger-than-anticipated jobs report for January, which came out Friday morning.
The U.S. added 200,000 jobs last month — about 15,000 more than expected — and average hourly wages rose by nine cents. The unemployment rate stood at 4.1 percent, unchanged from December.
The numbers were a good sign for workers. But they worried investors, who are concerned that the combination of higher wages, a tighter labor market and an uptick in inflation may push the Federal Reserve to raise its benchmark interest rate at its next meeting in March.
Stocks fell all across the board Friday. The S&P 500 dropped nearly 60 points, or 2.1 percent, and the Nasdaq Composite slid nearly 145 points, or 2 percent.