Dow falls 300 points, below 30,000 on fears Fed is over-tackling inflation

Dow futures fall on fears the Fed has gone too far

Stocks tumbled on Friday and were on track for another week of losses as investors worried that the Federal Reserve’s aggressive rate hikes to fight inflation would lead to an economic downturn.

Dow Jones Industrial Average futures fell 340 points, or 1.1%, while the S&P 500 lost 1.3%. The Nasdaq Composite fell 1.2%.

Friday marked the fourth straight session of losses for the major indexes, with the Dow falling below its June closing low and the 30,000-point mark. The U.S. Federal Reserve raised interest rates by a massive 75 basis points again on Wednesday and said it would raise rates again at its November meeting.

Bond yields surged this week after the Fed’s actions, with rates on 2-year and 10-year U.S. Treasuries hitting highs not seen in more than a decade.

The worst-hit stocks in the recession led losses this week, with consumer discretionary and real estate in the S&P 500 down at least 6% and energy down more than 7%. Growth stocks including tech giants Apple, Amazon, Microsoft and Meta Platforms all fell at least 1%.

Goldman Sachs cut its year-end target for the S&P 500 due to rising interest rates, expecting a downside of at least 4%.

On Friday, investors continued to assess whether the Fed’s recent moves portend a downturn ahead, with many believing or beginning to accept that a recession is in fact imminent.

“Based on our discussions with clients, most equity investors believe a hard landing is inevitable, and their focus is on the timing, size and duration of a potential recession, as well as investment strategies for that prospect,” Goldman wrote. David Kostin in a note to clients.

The major indexes posted their fifth straight decline in the past six weeks and were on track to close in the red. The Dow is down about 3.5% for the week, while the S&P and Nasdaq are down 4.4% and 4.6%, respectively.

Costco fell about 3%. Although reported fiscal fourth-quarter revenue and earnings beat analysts’ expectations, freight and labor costs are rising.

In other news, the pound hit a more than three-year low against the dollar after a new U.K. economic plan that included a slew of tax cuts rattled markets.

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