NATIONAL NEWS

Stocks plunge as recession fears mount

Sep 23, 2022, 12:39 PM | Updated: 2:18 pm
A man bikes past the New York Stock Exchange, Wednesday, Sept. 21, 2022, in New York. Stocks are of...
A man bikes past the New York Stock Exchange, Wednesday, Sept. 21, 2022, in New York. Stocks are off to a modestly higher start on Wall Street ahead of a widely expected interest rate increase by the Federal Reserve. The S&P 500 was up half a percent in the early going Wednesday, as was the Dow Jones Industrial Average. (AP Photo/Peter Morgan)
(AP Photo/Peter Morgan)

(CNN) — US stocks fell sharply in Friday trading as investors continued to worry about even more rate hikes from the Federal Reserve that could land the US economy in a recession.

The Dow tumbled 662 points, or 2.2%, in early afternoon trading. The S&P 500 and the Nasdaq Composite were each down 2.4%.

The Dow is on track to close the day below 30,000 points for the first time since June 17. A more sizable plunge could land the index at a two-year low Friday.

Investors don’t have many places to make money at the moment: In addition to sinking stocks, the bond market is also selling off, sending US Treasury yields soaring to 11-year highs in recent days. The 10-year yield fell back a bit Friday but remains near 3.7%, and the 2-year yield is above 4.1%. That’s a much better return than you can get with stocks these days, so high bond yields are adding pressure on the stock market.

Wall Street also remains concerned that the Fed’s rate-hiking plan could continue to increase borrowing costs, hurting the corporate profits that support their stock prices. And if the Fed is serious about slowing the economy down to gain control of runaway inflation, a recession could cause some real pain for consumers who buy the products that publicly traded companies make.

The market sell-off could continue for some time, as stock valuations are compressed by the Fed’s actions, said Ivan Feinseth, chief market strategist of Tigress Financial Intelligence. Investors “may not see a bottom until there’s confirmation that inflation indicators turned significantly lower, he added.

In other words: There’s much to worry about on Wall Street. CNN Business’ Fear and Greed Index has fallen solidly into “Fear” mode in recent days and is nearing “Extreme Fear.” Investors don’t see much to smile about on the horizon.


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Stocks plunge as recession fears mount