U.S. stocks slumped Friday a day after shaking off a "hot" inflation report and rallying to recent highs.

The Dow Jones Industrial Average fell 395.05 points, or 4.61%, to 29,643.67. The S&P 500 dropped 85.90 points, or 1.32%, to 3,584.01, and the Nasdaq Composite was down 327.76 points, or 3.08%, to 10,321.39.

The Labor Department reported Thursday that the consumer price index showed inflation for the year through September to be 8.2%, near a 40-year high. Despite the "hot" report, stocks surged Thursday. The Dow shot up 827.87 points, or 2.83%, after initially dropping 500 points after the report's release. It was one of the biggest turnarounds in recent years.

Still, on Thursday, the Federal Reserve reiterated that more interest rate increases are still likely as it battles inflation. The Fed has hiked rates five times this year and analysts believe it will increase rates again when it meets next month. Reports show the labor market to still be strong as well.

Some of the stocks that declined Friday include Apple (AAPL), which fell $4.61, or 3.22& to $138.38. Shares of Tesla (TSLA) fell $16.73, or 7.55%, to $204.99.

"With core CPI still moving in the wrong direction and the labor market strong, the conditions are not in place for a Fed policy pivot, which would be one of the conditions for a sustained rally in the equity market," wrote UBS global wealth management chief investment officer Mark Haefele in a Friday note to clients. "Moreover, as inflation remains elevated for longer and the Fed hikes further, the risk increases that the cumulative effect of policy tightening pushes the U.S. economy into recession, undermining the outlook for corporate earnings."