US stocks plummeted on Thursday, with the Dow Jones Industrial Average falling 700 points below 30,000 for the first time in more than a year.
The S&P 500 index slid 3.2%, while the Nasdaq Composite plunged 4%. They are now both in bear markets, down about 23% and 34% from their highs in January of 2022 and November of 2021, respectively. The Dow is also approaching bear market territory, down about 19% from its recent highs.
The nosedive follows Wednesday’s rate hike by the US Federal Reserve, the biggest in 28 years. It is the first time since 1994 that the Fed has raised rates by three-quarters of a percentage point, signaling that the economy is still weakening.
“It is not going to be easy,” Fed Chair Jerome Powell warned on Wednesday, revising this year’s GDP outlook downward and the outlook for unemployment and inflation upward.
“Markets believed and applauded Chairman Powell’s resolve to fight rising inflationary pressures. And that’s the problem,” said Quincy Krosby, chief equity strategist for LPL Financial, in a note seen by CNN.
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