The Dow fell 300 points, breaking below 30,000 on fears the Fed is overdoing its inflation fight.

Stocks fell on Friday and another loss was on pace for the week as investors feared the Federal Reserve’s aggressive hiking campaign to fight inflation could lead to an economic downturn.

Dow Jones Industrial Average futures fell 340 points, or 1.1%, while the S&P 500 fell 1.3%. The Nasdaq composite lost 1.2%.

Friday marked the fourth negative session in a row for the major averages, with the Dow falling below its June lows and hitting the 30,000 mark. The central bank implemented another super-sized rate hike of 75 basis points on Wednesday and indicated it would do another at its November meeting.

Bond yields rose this week following the Fed’s actions, with the 2-year and 10-year Treasury rates hitting highs not seen in a decade.

Stocks most vulnerable to the recession pared losses this week, with the S&P 500’s consumer discretionary and real estate down at least 6% and energy down more than 7%. Growth stocks, including big tech names Apple, Amazon, Microsoft and MetaPlatforms, each fell at least 1%.

Goldman Sachs It cut its year-end S&P 500 target It predicts a decline of at least 4% from here as rates continue to rise.

Investors on Friday continued to assess whether the central bank’s latest moves signal an impending downturn, with many believing or beginning to accept that a recession is indeed on the horizon.

“Based on our client discussions, the majority of equity investors accept the view that a hard landing scenario is inevitable, and their focus is on the timing, size and duration of the recession and investment strategies for that outlook,” Goldman Sachs wrote. In a note to David Costin’s clients.

The major averages are on pace for their fifth decline in the past six weeks and are closing in on losses for the week. The Dow is up about 3.5% this week, while the S&P and Nasdaq are both down 4.4% and 4.6%, respectively.

Costco fell 3%. While fiscal fourth-quarter revenue and earnings topped analysts’ expectations, it saw higher inventory and labor costs.

In other news, the pound hit a new low in more than three decades against the US dollar after a new UK economic plan, including tax cuts, rocked markets.

Leave a Reply

Your email address will not be published.