An unexpectedly strong report on inflation is battering Wall Street, and stocks are buckling toward their weakest levels in nearly two years.

The S&P 500 was 2% lower in early trading Thursday after worse-than-expected data showed inflation is not slowing and instead is spreading more widely across the economy. The Dow was down 502 points at 9:40 a.m. EST.

That’s forcing investors to brace for continued, big hikes to interest rates by the Federal Reserve to get inflation under control, and the potential recession those moves could create.

The S&P 500 is coming off six straight losses and has already lost a quarter of its value this year.

“A hawkish reaction to the data could add more pressure to stocks,” Anderson Alves of ActivTrades said in a report.

Minutes from the Fed’s last meeting, released Wednesday, underscored the central bank’s commitment to taming “unacceptably high” inflation.

The Fed and other central banks in Europe and Asia have raised rates by unusually big margins to cool inflation that is at multi-decade highs, but traders are afraid they might tip the global economy into recession.

Delta Air Lines shares jumped more than 4% premarket after it reported a $695 million third-quarter profit. Atlanta-based Delta said higher average fares this summer and a lucrative credit-card business more than offset rising fuel costs. The airline forecast that revenue during the final three months of the year will top pre-pandemic levels.

At midday in Europe, the FTSE 100 in London gained 0.1%, the DAX in Frankfurt rose 1% and the CAC 40 in Paris added 0.5%.

In Asia, the Shanghai Composite Index lost 0.1% to 3,016.35 and the Nikkei 225 in Tokyo sank 0.6% to 26,237.42. Hong Kong’s Hang Seng tumbled 1.9% to 16,389.11, its lowest close in more than 11 years.

The Kospi in Seoul fell 1.8% to 2,162.87 while Sydney’s S&P-ASX 200 gained less than 0.1% to 6,642.60.

India’s Sensex lost 0.7% to 57,205.89. New Zealand's benchmark lost 0.5% and Southeast Asian markets also declined.

In energy markets, benchmark U.S. crude gained 13 cents to $87.40 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the price basis for international oil trading, added 20 cents to $92.65 per barrel in London.

The dollar edged back to 146.68 after hitting a 24-year high of 145.85 on Wednesday.

The dollar's exchange rate has been rising against other currencies due to the Fed's rate hikes and recession fears. The yen's weakness has prompted expectations Japan's central bank might intervene for a second time to prop up the exchange rate following an intervention in September.

The euro strengthened to 97.48 cents from 97.06 cents.

On Wednesday, the S&P 500 gave up 0.3% for its sixth daily decline and the Dow slid 0.1%.

The S&P 500 is down 25% so far this year and close to a two-year low.