US stock indexes fell on Thursday, with high-profile tech stocks tackling recession concerns of high inflation in decades following the Federal Reserve’s biggest rate hike since 1994.
The sell-off was severe as the Fed’s aggressive move raised fears of a monetary tightening from global central banks that could slow growth around the world. Switzerland and Britain raised rates after the Fed’s 75-basis-point hike on Wednesday.
Among the mega-caps, Apple, Microsoft Corp and Tesla were some of the biggest losers as investors shunned so-called growth stocks, which drove much of the stock-market rally over the past two years.
Ross Mayfield, investment strategy analyst at Baird, said: “The sell-off is entirely related to a change in central bank policy – there are new concerns of a synchronized global recession, with central banks around the world getting faster than expected.” Louisville, Kentucky.
“The Fed and other central banks are deliberately engineering the recession and every day it persists, the chances of hitting a soft landing are getting harder and harder.”
Wells Fargo said the likelihood of a recession is now more than 50% after the Fed’s decision. Other banks that have warned of rising recession risks include Deutsche Bank and Morgan Stanley.
The benchmark index is down 22.9% year-on-year and is in a bear market, while the Nasdaq Composite and S&P 500 indexes were set to mark their 10th weekly decline in the past 11 weeks.
As of noon, the Dow Jones Industrial Average was down 685.76 points, or 2.24%, at 29,982.77, and the S&P 500 was down 114.83 points, or 3.03%, at 3,675.16, with both indices hitting their lowest level since January 2021.
The Nasdaq Composite was down 427.39 points, or 3.85%, at 10,671.77.
All 11 major S&P sectors fell, with the energy and consumer discretionary sectors falling 4.1% and 4.4%, respectively. Defensive sectors outperformed, with consumer staples down only 0.4%.
Among major US banks, Wells Fargo led losses, down 3.5%.
Retail bellwethers Walmart rose 0.8%, while Target dropped 1.8%.
CBOE Volatility Index, also known as wall StreetThe fear gauge reached 33.23 points.
The decline issues to an 8.56-to-1 ratio on the NYSE and a 5.58-to-1 ratio on the Nasdaq.
The S&P index recorded a new 52-week high and 93 new lows, while the Nasdaq recorded six new highs and 670 new lows.
The sell-off was severe as the Fed’s aggressive move raised fears of a monetary tightening from global central banks that could slow growth around the world. Switzerland and Britain raised rates after the Fed’s 75-basis-point hike on Wednesday.
Among the mega-caps, Apple, Microsoft Corp and Tesla were some of the biggest losers as investors shunned so-called growth stocks, which drove much of the stock-market rally over the past two years.
Ross Mayfield, investment strategy analyst at Baird, said: “The sell-off is entirely related to a change in central bank policy – there are new concerns of a synchronized global recession, with central banks around the world getting faster than expected.” Louisville, Kentucky.
“The Fed and other central banks are deliberately engineering the recession and every day it persists, the chances of hitting a soft landing are getting harder and harder.”
Wells Fargo said the likelihood of a recession is now more than 50% after the Fed’s decision. Other banks that have warned of rising recession risks include Deutsche Bank and Morgan Stanley.
The benchmark index is down 22.9% year-on-year and is in a bear market, while the Nasdaq Composite and S&P 500 indexes were set to mark their 10th weekly decline in the past 11 weeks.
As of noon, the Dow Jones Industrial Average was down 685.76 points, or 2.24%, at 29,982.77, and the S&P 500 was down 114.83 points, or 3.03%, at 3,675.16, with both indices hitting their lowest level since January 2021.
The Nasdaq Composite was down 427.39 points, or 3.85%, at 10,671.77.
All 11 major S&P sectors fell, with the energy and consumer discretionary sectors falling 4.1% and 4.4%, respectively. Defensive sectors outperformed, with consumer staples down only 0.4%.
Among major US banks, Wells Fargo led losses, down 3.5%.
Retail bellwethers Walmart rose 0.8%, while Target dropped 1.8%.
CBOE Volatility Index, also known as wall StreetThe fear gauge reached 33.23 points.
The decline issues to an 8.56-to-1 ratio on the NYSE and a 5.58-to-1 ratio on the Nasdaq.
The S&P index recorded a new 52-week high and 93 new lows, while the Nasdaq recorded six new highs and 670 new lows.