Stocks tumbled on Thursday as investors feared that central banks were prepared to continue raising interest rates to bring down inflation despite signs that economies were already slowing.
The S&P 500 closed with losses of 2.5 percent, adding to a downturn that came after the Federal Reserve announced a half-point rate increase on Wednesday. The tech-heavy Nasdaq composite index fell 3.2 percent and is down about 31 percent since the beginning of the year. The Bank of England and European Central Bank on Thursday also raised their policy rates by half a point.
“Risk aversion is returning as investors focus on global central bank tightening, rising recession risks and softer economic data, which suggests that the U.S. economy is seeing larger parts weaken now,” said Edward Moya, a senior market analyst at the foreign exchange brokerage OANDA.
Inflation F.A.Q.
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What is inflation? Inflation is a loss of purchasing power over…
