A brief respite from December’s brutal financial losses came undone Thursday as fears of global recession returned and central banks continued to hike interest rates.
US stocks fell into red territory on Thursday amid Wall Street fears of an economic recession and additional rate hikes by the Federal Reserve.
At closing bell, the Dow Jones Industrial Average Index fell by 348 points after earlier dropping over 800 points into the red. The S&P 500 dropped by 55 points as the tech-heavy Nasdaq Composite plummeted by 233 points.
Tech companies led the way in losses, with semiconductor giants like Lam Research and Advanced Micro Devices shedding 10% and 7%, respectively, and electric auto manufacturer Tesla tumbled over 8% after announcing steep discounts on vehicles.
CNBC reported “stocks fell to their lows” shortly after David Tepper, founder of the Appaloosa Management, told the outlet that he was “leaning short on the equity markets.”
“The upside/downside just doesn’t make sense to me when I have so many … central banks telling me what they are going to do,” he had said at the time.
The Dow has lost over 5.5% in December alone, and the S&P and Nasdaq have fared even worse this month, having dropped by nearly 7.5% and 9.7%, respectively.
Recession fears on the back of the Federal Reserve’s ongoing interest rate hikes have also weighed heavily on equities to date; in fact, the Fed’s most recent spike marked its highest point since December 2007, when the agency was cutting rates in order to prevent a financial collapse.