Biden's tweet touting economic gains haunts him as Wall Street sees sharp declines Tuesday

The stock market skidded Tuesday toward its worst loss in nearly a year after a disappointing report on inflation, days after President Biden appeared optimistic about the economy. 

On Saturday, Biden tweeted the "good news" to start the weekend, saying: "The stock market going strong is a sign of confidence in America’s economy."

The Dow Jones Industrial Average dropped 524 points, or 1.4%, from its record set a day earlier. The Nasdaq composite, which has been flirting with its all-time high set in 2021, sank 1.8%.

High interest rates hurt all kinds of investments, and they tend to particularly hurt high-growth stocks like technology companies. A 2.2% drop for Microsoft and 2.1% tumble for Amazon were the two heaviest weights on the market.

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President Biden said over the weekend that the stock market was "going strong" as Wall Street showed declines Tuesday.  (Photo by Kevin Dietsch/Getty Images)

The losses were widespread, and nearly 90% of the stocks in the S&P 500 fell in the wipeout. It’s one of the biggest speed bumps for the index since its big, record-setting rally began in late October. Much of that rise was due to hopes that inflation was cooling enough for the Fed to cut rates and relax the pressure on the economy.

The hotter-than-expected inflation report may have put the final nail into hopes that the first cut could arrive in March. It also pushed many forecasts past May into June, according to data from CME Group.

The Dow Jones Industrial Average dropped 731 points, or 1.9%, from its record set a day earlier. 

The Nasdaq composite, which has been flirting with its all-time high set in 2021, was down 2.2%, with an hour remaining in trading.

Despite the grim news on Wall Street, Biden said the economy was in a full-swing recovery.

Pedestrians pass the New York Stock Exchange as snow falls on Tuesday. (AP Photo/Peter Morgan)

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"Today’s data shows that wage growth has been the strongest of any economic recovery in 50 years – and inflation declined two thirds from its peak," he posted on X. "I'll continue to fight to lower costs for middle class families and stand in the way of Congressional Republicans who disagree."

The Associated Press contributed to this report.