US stocks fell sharply on Friday morning as investors continued to worry about even more rate hikes from the Federal Reserve that could push the US economy into a recession.
The Dow (INDU) was down 289 points, or 1%, at the market open. The S&P 500 (SPX) fell 1.1% and the Nasdaq composite (COMP) fell 1.1%.
The Dow Jones opened below 30,000 points, a level it briefly rose above on Thursday. If the Dow Jones ends the day below 30,000, it would be the first time it has closed below that barrier since June 17. And a slightly larger drop could send the index down to a two-year low on Friday.
Investors don’t have many places to make money at the moment: In addition to stocks sinking, the bond market is also selling off, pushing US Treasury yields to 11-year highs in recent days . The 10-year rate fell a little on Friday but remains close to 3.7%, and the 2-year rate is above 4.1%. That’s a much better return than you can get with stocks these days, so high bond yields add pressure to the stock market.
Wall Street also remains concerned that the Fed’s rate-hike plan could continue to drive up borrowing costs, hurting corporate earnings that support their stock prices. And if the Fed is serious about slowing the economy to rein in runaway inflation, a recession could cause real pain for consumers who buy the products made by publicly traded companies.
In other words: there is cause for concern on Wall Street. CNN Business’ Fear and Greed Index has fallen solidly into “Fear” mode in recent days and is approaching “Extreme Fear.” Investors see nothing to smile about on the horizon.