Stocks plummet as Fed, growth fears intensify

Stocks plummet as Fed, growth fears intensify

U.S. stocks fell on Friday morning as fears of hawkish Federal Reserve policy sent equity markets to their biggest weekly loss and bond yields continued their perilous climb to new highs.

The benchmark S&P 500 fell 1.2% in early trading, while the Dow Jones Industrial Average fell more than 300 points, or 1.1%, to fall below the 30,000 level. The tech-heavy Nasdaq Composite closed up 1.2%.

Meanwhile, the 10-year U.S. Treasury note jumped above 3.7, hitting its highest level since 2010. The U.S. dollar index hit a new two-decade high0. And in commodity markets, crude oil fell, with West Texas Intermediate (WTI) futures down 4.4% at $79.85 a barrel and Brent crude down 3.7% at 87, 05 dollars per barrel.

The moves come after Federal Reserve officials raised interest rates by 75 basis points for a third straight time earlier this week and Chairman Jerome Powell hinted in hawkish remarks that policymakers were prepared to accept economic pain in exchange for recovery of price stability.

Goldman Sachs cut its year-end 2022 target for the S&P 500 by about 16% to 3,600 from 4,300.

“The expected path of interest rates is now higher than we previously assumed, which skews the distribution of equity market results below our previous forecasts,” Goldman’s David Kostin said in a note.

NEW YORK, NEW YORK - SEPTEMBER 13: The Wall Street sign is seen on the New York Stock Exchange during evening trading on September 13, 2022 in New York City.  US stocks opened lower today and closed sharply lower with the Dow Jones down more than 1,200 points after the release of an inflation report that showed prices rose more than expected last month.  The Consumer Price Index released by the Bureau of Labor Statistics showed that prices rose 8.3 percent last year, for which economists had predicted an increase of 8.1 percent.  (Photo by Michael M. Santiago/Getty Images)

NEW YORK, NEW YORK – SEPTEMBER 13: The Wall Street sign is seen on the New York Stock Exchange during evening trading on September 13, 2022 in New York City. (Photo by Michael M. Santiago/Getty Images)

“Based on discussions with our clients, the majority of equity investors have taken the view that a hard landing scenario is inevitable and their focus is on the timing, size and duration of a potential downturn and investment strategies for that prospect “, He wrote.

In corporate news, Costco ( COST ) was among the movers on Friday after the bulk retailer reported fourth-quarter profit and revenue that beat Wall Street estimates, but said inflationary pressures are weighing on margins as consumer habits change. Shares were down 3% before the market.

Shares of FedEx ( FDX ) slipped about 2% in extended trading after the shipping giant announced cost-cutting measures and rate hikes, a week after a dismal pre-earnings report sent its stock down 20%.

Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc

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