Dow Jones falls 758 points to lowest in over a year, techs slide

The Dow Jones Industrial Average tumbled below the key 30,000 level on Thursday, falling 758 points intraday, as investors worried the Federal Reserve’s more aggressive approach toward inflation would bring the economy into a recession. Home Depot, Intel, Walgreens, JPMorgan, 3M, and American Express hit new 52-week lows amid growing recession fears while tech shares dropped after a bounce on Wednesday. Tesla, PayPal, Nvidia, Amazon and Netflix all slipped more than 3 per cent. Travel stocks including United, Delta and Carnival also took a leg lower. Revlon filed for Chapter 11 bankruptcy as the supply-chain crunch proved the tipping point for the debt-laden cosmetics giant.

The Dow had rallied on Wednesday after the Fed Chairman Jerome Powell announced its largest rate hike since 1994, but reversed those gains and then some on Thursday, tumbling to the lowest level since January 2021. The S&P 500 was on pace for its lowest since December 2020. The tech-heavy Nasdaq 100 sank 4 per cent. Treasury 10-year yields resumed their swift increase, surging as much as 21 basis points to 3.49 per cent. They later pared their advance by about half. Bitcoin, which earlier added as much as 6.1 per cent, fell to around $21,000, and headed toward its longest losing streak in the Bloomberg data going back to 2010.

Bad economic signals also weighed on sentiment, with mortgage rates in the US surging the most since 1987, ratcheting up pressure on would-be homebuyers and cooling the housing market. New US home construction dropped in May, highlighting the impacts of ongoing supply-chain challenges and sinking sales. 

Also, the number of Americans filing new claims for unemployment benefits fell less than expected last week, suggesting some cooling in the labour market, though conditions remain tight.

Oil hovered around $115 in choppy trading as the market weighed the prospect for more rate hikes against persistently tight supplies.