U.S. stocks sold off on Thursday as investors parsed through more hotter-than-expected economic data and hawkish Fedspeak.

The S&P 500 (^GSPC) sank 1.4%, while the Dow Jones Industrial Average (^DJI) declined by 1.3%. The technology-heavy Nasdaq Composite (^IXIC) plunged by 1.8%.

Bitcoin (BTC-USD) rallied, hitting a new six-month high as regulatory crackdowns drove continued uneasiness in the crypto space. The token briefly topped $25,000 for the first time since August.

The yield on the benchmark 10-year U.S. Treasury note rose to 3.867% Thursday midday. The dollar index inched higher by nearly 0.09% to trade at $104.02. Energy traded lower, with WTI crude oil prices down at $78.03 a barrel.

Investors digested fresh economic data on Thursday, the headline of which was January’s producer price index (PPI). Headline PPI came in at a monthly increase of 0.7%, hotter than the 0.4% expected by economists.

Also on the macroeconomic front, the number of Americans filing new unemployment claims slid to 194,000 for the week ended Feb. 11, the Labor Department said on Thursday, lower than the 200,000 expected by economists.

Two Federal Reserve officials also made headlines Thursday with comments suggesting the central bank could be in for a long battle with inflation.

Federal Reserve Bank of Cleveland President Loretta Mester said she was open to raising interest rates by 0.50%, more than what her peers voted for during the last monetary policy meeting. Meanwhile, Federal Reserve Bank of St. Louis President James Bullard said he favors additional rate hikes amid sticky inflation at the Fed's March meeting. Bullard said he favored bringing up the federal funds rate to 5.375% as soon as possible, up from a current level of 4.50%-4.75%.

Stocks had capped off the previous session higher after economic data continued to suggest the economy remains resilient in the face of higher rates and sticky inflation.

Retail sales surged 3% in January, the Commerce Department said on Wednesday, reversing two consecutive monthly declines. Coupled with higher-than-expected reading on consumer prices Tuesday, concerns the Fed could keep raising interest rates have weighed on stocks this week.

“Robust job growth and a level-shift up in disposable income in the new year also contributed to the Jan spending spike,” Bank of America Economist Aditya Bhave wrote in a note following the release.

Economists at JPMorgan raised their Q1 GDP projection to 2% from 1% on the news, noting that the acceleration in retail sales adds to “the goldilocks view of growth without inflation.”