Stocks have tumbled on Wall Street, erasing a rally from a day earlier, as markets assess the looming fallout from the US Federal Reserve’s stepped-up fight against inflation.

The Fed raised its benchmark interest rate by half a percentage point to slow consumer borrowing and inflation, which is at a four-decade high.

Now, traders are starting to fret more about the impact of the Fed’s moves to dampen demand and slow the economy.

Energy markets remain volatile as the conflict in Ukraine continues and demand remains high amid tight supplies of oil. European governments are trying to replace energy supplies from Russia and are considering an embargo, as OPEC and allied oil-producing countries decided to gradually increase the flows of crude they send to the world.

Higher oil and gas prices have been contributing to the uncertainties weighing on investors as they try to assess how inflation will ultimately impact businesses, consumer activity and overall economic growth.

Finance guru Scott Haywood told Gareth Parker on 6PR Breakfast the ASX was expected to fall dramatically when the market opens.

Press PLAY below to hear Scott Haywood’s ‘Finance Report’ on 6PR Breakfast