The Dow closed with its worst day in three months, falling more than 700 points as recession fears mounted

Stocks fell sharply on Thursday after new data showed retail sales fell more than expected, raising fears that the Federal Reserve’s relentless interest rate hikes could push the economy into recession.

The Dow Jones industrial average fell 764.13 points, or 2.25%, to 33,202.22 – its worst day since September as hopes for a year-end rally dimmed. The S&P 500 fell 2.49% to 3,895.75, bringing its decline for December to 4.5%. The Nasdaq Composite fell 3.23% to 10,810.53 as the battered tech-heavy index extended its 2022 losses to nearly 31%.

The selloff was broad-based, with only 14 stocks in the S&P 500 trading in positive territory. Shares of Mega Cap Tech tumbledwith stocks Apple And letters Down more than 4% Amazon And Microsoft was less than 3%. Shares Netflix a continued decline of 8.6% Digiday report The streaming company said it would refund advertisers after missing audience targets.

Disappointing retail sales report Inflation affects consumers. Retail sales fell 0.6% in November, the Commerce Department said. That was a bigger loss than the 0.3% decline in the Dow Jones Industrial Average.

The sell-off started on Wednesday after the central bank’s latest Increase overnight borrowing rate. The central bank said it would continue to raise rates through 2023 and forecast its fed funds rate to be a higher-than-expected 5.1%. With Wednesday’s half-percentage point hike, the target range for rates is now at 4.25% to 4.5%, the highest in 15 years.

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“The equity market’s reaction is now factoring in the slowdown, and ruling out the possibility of a ‘soft/gentle’ landing that Powell mentioned recently. [Brookings Institution],” Quincy Crosby, chief global strategist at LPL Financial, wrote Thursday.

“The tug-of-war between the Fed and the markets is on the market’s side: The recession is not ‘intermediate,’ and the Fed will be forced to act before 2024,” Crosby added.

The Dow closed below 34,000 on Wednesday, then intensified Thursday’s sell-off following poor retail sales data. Treasury yields fell on fears that the central bank was going too far, defying the Fed. The 10-year yield fell below 3.5%.

Bank stocks also fell as recession fears rose. JP Morgan Chase About 2.5% was lost.

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