The S&P 500 is now at the lowest point of the year and has shed all its gains from 2021. The Dow Jones Industrial Average is 20% below its record set early this year.
By DAMIAN J. TROISE and ALEX VEIGA
European stocks fell just as sharply or more after preliminary data there suggested business activity had its worst monthly contraction since the start of 2021. Adding to the pressure was a new plan announced in London to cut taxes, which sent U.K. yields soaring because it could ultimately force its central bank to raise rates even more sharply.
Crude oil prices tumbled to their lowest levels since early this year on worries that a weaker global economy will burn less fuel. Cryptocurrency prices also fell sharply because higher interest rates tend to hit hardest the investments that look the priciest or the most risky. All but nine stocks in the S&P 500 were in the red, with technology companies, retailers and banks among the biggest weights on the benchmark index. The major indexes are on pace for their fifth weekly loss in six weeks.
The higher rates mean Goldman Sachs strategists say a majority of their clients now see a “hard landing” that pulls the economy sharply lower as inevitable. The question for them is just on the timing, magnitude and length of a potential recession.
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