Stocks crater, Dow hits 2022 low, and oil plunges as Fed and growth fears roil markets


US stocks spiraled on Friday to cap a volatile weekly low as fears that aggressive central bank tightening would trigger a recession wreaked havoc in financial markets.

The benchmark S&P 500 plunged 1.7% and tested a fresh 2022 low. The Dow Jones Industrial Average lost 486 points, or 1.6%, briefly falling into bear market territory at one point during the session and closing at a 2022 low And the tech-heavy Nasdaq Composite lost 1.8%. The CBOE Volatility Index (^VIX) – Wall Street’s “fear measure” – has fluctuated above 30.

Meanwhile, the 2-year US Treasury bond rose above a 15-year high of 4.2% and the 10-year US Treasury held at nearly 3.7%, the highest since 2010. Commodity markets fell Crude Oil strong, with West Texas Intermediate (WTI) futures down nearly 6% at $78.74 a barrel.

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The moves come after Federal Reserve officials earlier this week hiked interest rates by 75 basis points for a third straight month and Chair Jerome Powell made hawkish comments that policymakers were willing to make economic gains in exchange for restoring price stability to accept pain. Central banks around the world have followed suit in recent days.

Goldman Sachs cut its 2022 year-end target for the S&P 500 Index by about 16% from 4,300 to 3,600.

“The expected rate path is now higher than previously thought, tipping the distribution of equity market outcomes below our previous forecast,” Goldman’s David Kostin said in a statement.

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“Based on our client conversations, a majority of equity investors believe that a hard landing scenario is inevitable and their focus is on the timing, magnitude and duration of a potential recession and investment strategies for those prospects,” he wrote.

In company news, Costco (COST) was among the climbers on Friday after the mass retailer reported fourth-quarter earnings and revenue that beat Wall Street estimates, but said inflationary pressures weighed on profit margins as consumer habits changed . Shares lost 4.3% on Friday.

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FedEx (FDX) shares fell 3.3% after the shipping giant announced cost-cutting measures and tariff increases, a week after a somber pre-earnings announcement caused its stock to plunge 20%.

Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc

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