What happened 

Shares of Airbnb (ABNB -0.36%) fell this morning after the latest inflation data showed that consumer prices rose higher than expected in September. 

That bad inflation news caused the S&P 500 to fall 0.6% and the tech-heavy Nasdaq Composite to drop 1.2% this morning, pushing the travel stock down by as much as 6.3% early in the trading day. Airbnb shares bounced back slightly and were down 1.3% as of 11:19 a.m. ET.

So what 

The Bureau of Labor Statistics released its latest inflation data today that showed consumer prices increased by 0.4% in September, which was higher than the 0.3% that analysts were estimating. On an annual basis, consumer prices increased by 8.2% and remain at a nearly 40-year high.

Person looking at a phone.

Image source: Getty Images.

That sent stock market indices falling hard today, and Airbnb's stock wasn't spared. Airbnb's investors are worried that the latest inflation data will encourage the Federal Reserve to potentially increase the federal funds rate by 75 basis points at its next two meetings (which will occur in November and December). 

Continued aggressive interest rate increases could end up severely slowing down the U.S. economy -- or even spurring a recession -- and Airbnb investors are concerned that a slowdown will curb consumer spending for travel. 

Now what 

Airbnb's stock has been beaten down along with many other stocks and is down 36% over the past 12 months. 

While a recession could certainly curb consumer spending for travel, the company has already weathered some tough times with COVID-related shutdowns and has come out on the other side with its travel business firmly intact

There could be more short-term pain for inventors as they process the latest inflation data and the Fed's response to it, but this travel stock could still end up being a good investment over the long term if it can handle the latest difficulties like it did during the peak of the pandemic.