Wall Street’s Nasdaq Composite tumbled 5 per cent on Thursday in its steepest decline since the market tumult in 2020, marking an abrupt reversal from a powerful rally in the previous trading session.
The decline put the index, where many of the leading US technology companies are listed, on track for its steepest one-day drop since September 2020.
The blue-chip S&P 500 index also suffered heavy selling, sliding almost 4 per cent. Every major sector was in the red, with economically sensitive industries including consumer discretionary, technology and financial companies among the biggest fallers.
US government bonds also endured an intense bout of selling pressure, sending the yield on 10-year Treasury notes soaring 0.18 percentage points to 3.1 per cent per cent.
The sharp reversal after a buoyant performance for US stocks and Treasuries in the previous session comes as leading central banks withdraw crisis-era stimulus measures at a time when concerns over global economic growth are mounting.
The Federal Reserve, the world’s most influential central bank, raised its main interest rate by 0.5 percentage points on Wednesday in its biggest increase since 2000, as it attempts to tame intense inflation. Fed chief Jay Powell sent a strong signal that the bank is likely to raise rates by the same amount at it next two meetings.
However, in a sign of the headwinds facing global economies, the Bank of England on Thursday warned the UK will slide into recession this year as higher energy prices push inflation above 10 per cent.
Read more on the day’s market moves here.
Reporting by Adam Samson, Naomi Rovnick, George Steer and Ian Johnston in London, Eric Platt in New York and Hudson Lockett in Hong Kong