US stocks suffer biggest fall in two years as Dow Jones plummets 666 points
Worries about the impact of a tightening job market on the prospects for inflation and a surge in bond yields sent investors fleeing equities on Friday, with the Dow Jones Industrials Average swooning almost 666 points, for its biggest daily percentage loss in twenty months.
It was the biggest daily point fall in the Dow in more than nine years.
With Friday's rout, Wall Street's three major indexes logged their biggest weekly losses in two years, after closing at record highs the previous week. The S&P 500 and Dow saw their worst weeks since early January 2016 while Nasdaq had its worst week since early February 2016.
It comes days after Donald Trump took credit for record highs on the US stock market during his State of the Union address.
"People are starting to really get increasingly uncomfortable with the rapid rise in interest rates that we have seen and the uncertainty of how that is actually going to start to play out relative to competition for stocks," said Chuck Carlson, Chief Executive Officer At Horizon Investment Services in Hammond, Indiana.
Overnight stock price losses accelerated after the US Labor Department reported employment grew more than expected in January with the biggest wage gain in more than 8-1/2 years. The picture of workers commanding higher salaries fueled expectations that inflation is on the rise, which could prompt the Federal Reserve to take a more aggressive approach to rate hikes this year.
That caused the 10-year Treasury yield to surge to 2.8450 percent the highest since Jan. 2014, which could make returns on Treasuries look more attractive relative to stocks.
US stocks suffer biggest fall in two years as Dow Jones plummets 666 points | The Independent