Dow Jones Industrial Average average fell to a nearly two-year low on Friday, the first major U.S. stock index to fall below its June low, on fears that aggressive rate hikes interest cause a recession.
* The US Federal Reserve raised interest rates 75 basis points earlier this week and has pledged to keep doing so until inflation is under control, in line with a tightening stance by many central banks around the world. the world.
* The large stock index came close to falling 20% below its all-time closing high on Jan. 4, which would confirm at the close that it is in a bear market, by a commonly used definition.
* The S&P 500 confirmed that it was in a bear market in June and the Nasdaq in March.
* “The Fed’s latest actions leave us with a feeling that the end of rate hikes is nowhere near,” said Rick Meckler, a partner at Cherry Lane Investments.
* “There is very little positive news at the moment and that could lead to some kind of final pullback… It is certainly possible that we could get closer to the lows in the short term.”
* Dire prospects for a handful of companies – most recently FedEx Corp (NYSE: FDX ) and Ford Motor (NYSE: ) Co – have also added to the woes in a seasonally weak period for markets.
* Goldman Sachs (NYSE: ) has cut its year-end target for the benchmark S&P 500 index by approximately 16% to 3,600 points, down 2.5% from current levels.
* The Dow Jones Industrial Average was down 408.50 points, or 1.36%, at 29,668.18, after falling briefly before this year’s low of 29,653.29 points on June 17. The S&P 500 was down 65.07 points, or 1.73%, at 3,692.92, and the was down 220.27 points, or 1.99%, at 10,846.54.