US investors fret about possible recession as S&P 500 plummets into bear territory and global markets feel aftershocks
The Dow Jones was down more than 875 points, or 2.8%, and the tech-heavy Nasdaq composite crumpled 4.7% as investors continued to sour on once high-flying tech stocks., Tokyo’s Nikkei was off 1.6% and the Shanghai composite was down 0.9%. Stocks in Asia have also been hurt by worries about Covid infections in China, which could push authorities to resume tough, business-slowing restrictions.
No one thinks this week’s expected rise in rates will be the last, with markets bracing for a continued series of bigger-than-usual hikes. Those would come on top of some already discouraging signals about the economy and corporate profits, including a record-low preliminary reading on consumer sentiment that was soured by high gasoline prices.
The gap between the two-year and 10-year yields is also narrowing, a signal of increased pessimism about the economy in the bond market. If the two-year yield tops the 10-year yield, some investors see it as a sign of a looming recession.
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