The S&P 500 tumbled 59.8 points, falling 2.12% to 2,762.13, while the Nasdaq closed 144.91 points lower at 7,240.9, down 1.96%. The broad-based S&P 500 sank 2.2 percent to end the week at 2,761.27, while the tech-rich Nasdaq Composite Index fell 2.0 percent to 7,240.95.
The plunge in stocks came after U.S. payrolls data showed a jump in wage inflation.
However, even after last week's sell-off, stock markets remain at historic highs.
With the huge drop on Friday, the three major Wall Street indexes ended with their biggest losses for one week in almost two years, after closing the previous week at record highs.
The CBOE Volatility Index, the most widely followed gauge measure of stock market volatility, rose to 14.99, after having fallen in the previous two sessions.
The Dow dropped almost 666 points, or 2.5 percent, just two weeks after it surpassed the 26,000-mark for the first time.
After surgery, Eagles fan frets: Did I miss the Super Bowl?
The Eagles contacted Haley's family via Facebook on Friday evening, said her father, Bob Parks. But Parks, who came to the Eagles attention through a viral video, still could face a hurdle.
USA stocks slumped Friday, and the market suffered its worst week in two years, as fears of inflation and disappointing quarterly results from technology and energy giants spooked investors.
S&P 500 e-mini stock futures EScv1 extended losses after 4 p.m. ET close in the cash market.
Those factors could help to underpin US earnings even after the tax benefit is priced in. Its weekly rout hit 3.7 per cent, most since February 2006. Some investors saw a potential buying opportunity.
"It's a legitimate concern, when inflation spikes up a little bit, that people should evaluate how is this going to affect profits and how is this going to affect the Fed", said Jonathan Golub, chief US equity strategist at Credit Suisse.
The expectation among investors has always been for a gradual rise in interest rates, as the Federal Reserve slowly pulls back from the stimulus that it implemented for the economy amid the Great Recession. The Fed started raising rates two years ago.
The data sent interest rates higher.
Will Not Break Alliance with BJP: TDP
Responding to the question of the TDP MPs threatening to resign, he said , "We never said that, it is all speculation". Reportedly , Naidu is holding an emergency meeting on Sunday to rethink the party's alliance with the saffron party.
The materials group, which includes precious and base metals miners and fertilizer companies, lost 2.5 per cent. Barrick Gold Corp. slipped 3.2 per cent to $17.13, and Goldcorp Inc. fell 1.5 per cent to $17.25.
"The major driver of the selloff is the awakening to the new interest rate environment", says Erik Davidson, chief investment officer at Wells Fargo Private Bank.
The numbers were a good sign for workers.
President Trump, who repeatedly has touted the stock market's gains as evidence that his economic policy efforts are paying off, trumpeted the January jobs report on Twitter.
Yields on the 10-year U.S. Treasury note shot up to a four-year high within five minutes of release of the Labor Department's unemployment report for January.
Investors headed for the exits amid growing fears over a bond market rout, triggered by early signs of inflation in the United States as economic growth accelerates and wages appear to finally be rising after years of stagnation.
S.Africa's Zuma faces new no-confidence vote
Zuma is due to deliver the annual state of the nation address on Thursday, despite the political manoeuvrings to unseat him. Mbete said she had consulted "relevant stakeholders".
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