US inflation hits 40-year high of 8.6% as food, gas and shelter costs rise

Inflation rate sends stock markets into tailspin as S&P 500 falls over 2% and Nasdaq down over 3.5%

Inflation in the US rose unexpectedly last month to a fresh four-decade high of 8.6%, the labor department said on Friday.

The latest consumer price index (CPI) figures showed that the cost of living increased by one percentage point from April and was broad-based, with the indexes for shelter, gasoline and food being the largest contributors.