The Dow Jones Industrial Average hit a near two-year low on Friday, the first major U.S. stock index to fall below its June trough on an intraday basis and mark a new low for the year, following fears of an economic slump brought on by aggressive interest rate hikes.
The Dow Jones Industrial Average fell by 713 points, or 2.4%, falling below 30,000 to a new low for the year. The index is now down 20% from its high, known as bear market territory.
The S&P 500 fell 2.5% and headed of a new 2022 closing low, while the Nasdaq Composite slid about 2.5%.
The U.S. Federal Reserve raised interest rates by 75 basis points earlier this week and vowed to keep going until inflation was in check, in line with the monetary policy tightening stance by many central banks around the globe.
The blue-chip index was also close to falling 20% below its Jan. 4 record closing high, which would confirm the index has been in bear market at the close, according to a commonly used definition.
The S&P 500 confirmed it was in bear market in June and the Nasdaq in March.
Technology and growth stocks slid with megacap names including Alphabet Inc, Apple Inc, Amazon.com , Microsoft Corp and Tesla Inc all down more than 1%.
All the 11 major S&P sectors declined in early trading, led by a 5.6% drop in energy shares. Banks fell 1.6%.
Costco Wholesale Corp shed 2.4% after the big-box retailer reported a fall in its fourth-quarter profit margins.
The CBOE volatility index, also known as Wall Street‘s fear gauge, rose to 28.72 points.
Meanwhile, Fed Chair Jerome Powell is set to give opening remarks on the transition to a post-pandemic economy at an event at 2 p.m. ET.
Declining issues outnumbered advancers for a 11.33-to-1 ratio on the NYSE and a 6.67-to-1 ratio on the Nasdaq.
The S&P index recorded no new 52-week high and 125 new lows, while the Nasdaq recorded seven new highs and 558 new lows.