Dow falls 530 points, Nasdaq plunges nearly 3% as hot inflation report keeps Fed on track for more jumbo rate hikes

• Stocks dropped Tuesday following new inflation data that came in hotter than expected.
• August CPI showed inflation rose 8.3% compared to the same month last year, despite falling gas prices.

US stocks dropped Tuesday following a hotter-than-expected inflation report, which paves the way for the Federal Reserve to maintain a hawkish policy approach.

August's Consumer Price Index showed inflation was up by 8.3% compared to the same month last year.

That's lower from the 8.5% reading in July, and 9.1% in June, which was the highest reading in four decades. Though the reading is still hotter than economists were expecting, with headline inflation projected to fall by 0.1% in August.

"We got a hotter than expected August CPI number this morning, frightening market participants and greatly increasing the likelihood of a 75 basis point move from the Fed next week," said Peter Earle, economist at the American Institute for Economic Research. "A 100 basis point move is again within the realm of possibility."

Here's where US indexes stood as the market opened 9:30 a.m. on Tuesday:

• S&P 500: 4,028.85, down 1.98%

• Dow Jones Industrial Average: 31,855.25, down 1.62% (526.09 points)

• Nasdaq Composite: 11,930.61, down 2.74%

Larry Summers said the new inflation data won't derail the Fed from a jumbo interest rate hike in September. In his view, the Fed is heading toward a 75 basis point hike at the next meeting regardless of Tuesday's data.

"Rich Dad Poor Dad" author Robert Kiyosaki said a historic market crash is looming. The personal finance guru noted that it was vital investors get into crypto before that happens.

Meanwhile, uranium prices have climbed toward their highest mark since the Ukraine invasion as Europe's energy crisis drives up nuclear bets. Prices rallied back above $50 a pound, and Bank of America warned it could surge to over $70 next year.

Oil prices slipped, with West Texas Intermediate down 0.54% to $87.20 a barrel. Brent crude, the international benchmark, inched lower 0.71% to $93.33 a barrel.

Gold edged lower 1.90% to 1,707.60 per ounce. The 10-year yield ticked higher 0.7 basis points to 3.435%.

Bitcoin dropped 4.61% to $21,382.01.