Stocks dropped Friday, building on their year-end sell-off, as fears grow over a recession taking place as the Federal Reserve continues raising rates.
The Dow Jones Industrial Average lost 281.76 points, or 0.85%, to 32,920.46. The S&P 500 fell 1.11% to 3,852.36. Meanwhile, the tech-heavy Nasdaq Composite declined 0.97% to 10,705.41.
The indexes notched a second consecutive week of losses. The S&P 500 fell 2.08% for the week, and putting its December losses at 5.58%, as hopes for a year-end rally fizzle. The Dow and Nasdaq slid 1.7% and 2.7%, respectively.
Trading was especially volatile Friday with a large amount of options expiring. There were $2.6 trillion worth of index options expiring, the highest amount “relative to the size of the equity market in nearly two years,” according to Goldman Sachs. At session lows, the Dow was down as much as 547.63 points, before paring back some of those losses.
The sell-off was broad-based, with three stocks falling for every advancer at the New York Stock Exchange. At one point, there were only 10 S&P 500 names in positive territory. The real estate and consumer discretionary sectors were the biggest laggards, down nearly 3% and 1.7%, respectively.
Stocks fell this week in the wake of the Fed’s 50 basis point interest rate hike on Wednesday — the highest rate in 15 years. The central bank said it would continue hiking rates through 2023 to 5.1%, a larger figure than previously expected.
Following the policy update, the Dow dropped 142 points on Wednesday, plunged 764 points Thursday, and declined further on Friday.
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