The major averages sold off into the close, finishing out a terrible week, month and quarter that brought the S&P 500 to a new 2022 low. The Dow Jones Industrial Average finished down 500 points, or 1.70%. The S&P 500 closed down 54 points or 1.5% while the Nasdaq Composite dropped 161 points or 1.6%.

An inflation report closely watched by the Federal Reserve released Friday showed that prices continued to increase at a rapid pace.

Fed Vice Chair Lael Brainard on Friday underscored the need to bring down inflation, saying the central bank is "committed to avoiding pulling back prematurely" on restrictive monetary policy.

Nike shares fell sharply in its worst day since 2001 after the company reported that sales increased, but supply chain and inventory issues hampered the bottom line in its fiscal first quarter. The stock was last down 13%.

Stocks sold off Thursday, with the Dow losing more than 1%, and the S&P 500 and Nasdaq Composite each dropping more than 2%. Investors weighed concerns over future rate-hiking decisions from the Fed and the impact on the market.

Those losses put the major averages on pace for sharp weekly losses. The S&P 500 is off 1% for the week. The Dow is down 1.1% and the Nasdaq is 0.2% lower.

Friday also marked the last day of the month and the third quarter. For September, the S&P 500 and Dow are down more than 7% each through Thursday's close. That would be the worst monthly performance for the Dow since March 2020 and the biggest one-month decline for the S&P 500 since June. The Nasdaq is headed for its biggest monthly loss since April, losing 9.1%.

Quarter to date, the S&P 500 and Nasdaq are headed for their first three-quarter losing streak since 2009, losing 4% and 2.7%, respectively. The Dow is down 5.4% in the third quarter and is on pace to post a third-straight losing quarter for the first time since 2015.

Wall Street earnings analysts lowered their third quarter earnings estimates more than normal in the past three months, according to FactSet senior earnings analyst John Butters.

The estimated earnings growth rate for all the companies in the S&P 500 index now stands at 2.9% and, if that turns out to be the actual number for the quarter, it will prove the slowest rate of expansion since the third quarter of 2020, when earnings fell 5.7%.

How bad has the adjustment on the Street been? Butters says that when the second quarter ended on June 30, third quarter earnings were forecast to expand by 9.8%.

Because the denominator on the market has contracted, the forward 12-month price-to-earnings multiple on the S&P 500 is now 15.4, Butters says, against a 5-year average of 18.6 and a 10-year average of 17.1.

The market is 'the transmission mechanism' of the Fed, financial adviser says

Some market observers say they see the Federal Reserve using the markets as a vehicle for curbing inflation by way of rate hikes.

At least 53 stocks in the S&P 500 hit new 52-week lows during Friday afternoon trading.