Spencer Platt/Getty Images
Stocks continued their steep decline Thursday, a day after the Federal Reserve raised rates.
The Fed signaled it expects to hike rates twice in 2019. It previously had expected three rate hikes next year.
Watch the major US indexes trade in real time here.
Wall Street extended sharp losses to hit new lows for the year Thursday as markets continued to digest the Federal Reserve’s decision to raise rates.
The Dow Jones Industrial Average plunged about 2%, or more than 450 points, to its lowest level in 14 months. The Nasdaq Composite shed 1.6% and briefly dipped into a bear market, defined as a fall of more than 20% from recent peaks, for the first time since the financial crisis. The S&P 500 fell 1.6%.
Technology shares, which had led the latest bull run, were among the biggest losers, with Amazon, Apple, and Netflix falling at least 2% each. Google parent-company Alphabet was nearly 1% lower. After being called “toxic” by Citron Research, shares of Twitter sank more than 11%.
A bruising sell-off had started Wednesday after the Federal Reserve raised its benchmark interest rate a quarter percentage point and signaled it would take a tentative approach to setting monetary policy next year.
“Yesterday, there is no doubt that markets were expecting a bailout from the Fed—and threw a tantrum when they didn’t get it,” said Brad McMillan, chief investment officer of Commonwealth Financial Network. “Powell put the markets on notice that the Fed will be much less willing to shape monetary policy in order to support asset prices.”
Concerns about the potential for a partial government shutdown this weekend also weighed on Wall Street, after President Donald Trump told congressional leaders he will not sign a government funding bill because of a dispute over his long-promised border wall.
The VIX — a measure of expected volatility — jumped more than 14% to at 29.22, its highest level since February. Also known as Wall Street’s “fear index,” the Cboe Volatility Index tends to rise when stocks are down.
Not helping the mood, oil prices fell to their lowest level in more than a year, even after the US reported a drawdown in inventories for a third straight week. West Texas Intermediate was trading just under $46 per barrel, and Brent around $54.70. Worries about oversupply have helped send prices deep into bear territory, down nearly 40% from their October highs.
The dollar slid 0.75% against a basket of major peers. Against the Japanese yen, the greenback weakened 1.4%. The yield on the 10-year Treasury note continued to edge lower, down 1.4 basis points to 2.762%.
“The price action reflects the unwind of easy money and years of financing engineering, though the Fed’s not sure how soon (or much) this spills into the real economy,” Mark McCormick, an analyst at TD Securities, said in an email. “What’s clear to us, however, is that this backdrop reinforces the steady climb down in the broad USD.”
more recommended stories
Mark Zuckerberg humiliated by group of lawmakers, who accuse Facebook’s CEO of spectacular leadership failure
A devastating report from a UK.
Here are the latest predictions for Apple’s 2019 products, according to one of the most reliable Apple analysts
Getty Ming-Chi Kuo is one of.
BMW’s North American CEO reveals how the carmaker will continue to create passion and emotion for the luxury brand
BMW’s Bernard Kuhnt. BMW Bernhard Kuhnt.
Russia’s RT attacks Facebook for suspending 4 viral news channels that broadcasted Kremlin talking points to millennials
The editor of the Russian state-owned.
The CEO of Charles Schwab Investment Management says there’s a major challenge facing ETFs for buzzy do-good funds, and it’s why the firm hasn’t entered the market
Marie Chandoha, CEO of Charles Schwab.
Facebook accused of acting like ‘digital gangsters’ in a devastating report by lawmakers
British lawmakers have accused Facebook of.
Asian markets rip higher as Trump praises ‘very productive’ trade negotiations with China
Aly Song/Reuters Asian markets rocket higher.
Andrew McCabe describes ‘incredibly turbulent’ period after Trump fired James Comey and reveals what he says prompted Rod Rosenstein to suggest wearing a wire to record the president
Former FBI deputy director Andrew McCabe..
Nearly everyone living in Alaska gets about $2,000 a year from the state’s $65 billion fund. We asked 9 Alaskans how they spend it.
Businesses throughout Alaska take advantage of.
Australia’s major political parties have been hacked months out from a federal election, Prime Minister Scott Morrison reveals
Australian Prime Minister Scott Morrison has.