U.S. equity markets tumbled for the week as inflation hit a 40-year high, putting even more pressure on the Federal Reserve to tighten financial conditions.

The S&P 500 index had its worst week since January, dropping 5.1 percent to 3,901. The Dow Jones industrial average fell 4.6 percent on the week, while the Nasdaq sank 5.6 percent.

Consumer price index data shattered Wall Street’s estimates, rising 8.6 percent from a year earlier and 1 percent month-over-month. Shelter, food and gas prices led the broad advance. Core CPI, which excludes the more volatile food and energy components, rose 0.6 percent from the prior month and 6 percent from a year ago.

The red-hot reading quieted any notion that inflation may have peaked. Two-year Treasury yields soared to 3 percent for the first time since 2008, and traders began to see 50-50 odds of the Fed raising rates by 75 basis points in July.

Quincy Krosby, chief equity strategist for LPL Financial, says the next Federal Open Market Committee meeting will be vital as “markets wait to hear how the Fed expects to combat costs that are rising beyond what the average economist predicted.”

Signs pointed to consumers buckling under the weight of higher energy and food costs. West Texas Intermediate crude oil futures topped $122 a barrel at one point as the average retail price for gasoline approached $5 a gallon. Target cut its profit outlook for the second time in three weeks as the retailer struggled to ease an inventory surge. The University of Michigan consumer sentiment survey tumbled to 50.2 — the lowest reading on record.

More U.S. consumers are borrowing to cover the higher cost of everyday essentials. There were a record 537 million credit card accounts in the first quarter, a jump of 31 million over the past year, according to a Federal Reserve Bank of New York quarterly report.

Elsewhere in the world, the European Central Bank raised its inflation forecasts while lowering economic growth projections for 2022 and 2023. The World Bank trimmed its estimate for global growth this year to 2.9 percent from April’s 3.2 percent.

Fed policymakers will meet Wednesday to set interest rates. April data for U.S. retail sales is expected to reflect a pullback in consumer spending, while producer prices could trend higher as surging inflation drives up costs.

The Treasury will sell 13- and 26-week bills Monday. They yielded 1.409 percent and 2.017 percent in when-issued trading, respectively. It will auction $34 billion in one-year bills on Tuesday, and four- and eight-week bills Thursday.