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NEW YORK - U.S. stock futures turned negative and European shares fell further on Friday after higher-than-expected U.S. consumer price data for May fueled inflation concerns and likely kept the Federal Reserve on track to aggressively hike interest rates.

The consumer price index increased 1.0% last month after gaining 0.3% in April, the Labor Department said. Economists polled by Reuters had forecast the monthly CPI picking up 0.7%.

Some economists and market participants had expected the data to show inflation had peaked in May, but the report indicated otherwise.

"It was pretty hot. This report suggests that underlying inflation pressures remain quite strong," said Aichi Amemiya, senior U.S. economist at Nomura.

Two-year U.S. Treasury yields rose to their highest level in three-and-a-half years and a part of the yield curve reinverted after the data showing acceleration in consumer prices.

U.S. stock futures fell more than 1% and the major European bourses extended declines after the data's release, with France's CAC 40 down 2.0%, Germany's DAX off 1.88%, and the FTSE 100 in Londow 1.73% lower.

The pan-European STOXX 600 index was down 2.04% and MSCI's gauge of stocks across the globe fell 0.78%.

Investors expect the Fed to raise rates by 50 basis points next week as major central banks tighten policy to tame soaring inflation that has been sparked by surging crude oil and food prices, along with supply chain issues.

"We don't see any possibility of a 75 basis point hike next week," Amemiya said, but the likelihood of more 50 basis point hikes has increased.

The Band of England and Sweden's Riksbank are expected to hike rates again next week, while the European Central Bank on Thursday said it would deliver its first rate rise since 2011 next month, followed by a potentially larger move in September.