US stock markets ended sharply lower on Thursday on worries that the Federal Reserve's aggressive fight against inflation could hobble the US economy, and as investors fretted about a rout in global currency and debt markets.
With tech-related heavyweights Tesla, Apple and Nvidia all slumping, the Nasdaq sank to near its lowest level of 2022, set in mid-June.
The S&P 500 touched lows last seen in November 2020. Down more than 8 percent in September, the benchmark is on track for its worst September since 2008.
The S&P 500 lost 2.1 percent to 3,640, the Nasdaq Composite lost 2.8 percent to 10,737, and the Dow Jones Industrial Average fell 1.5 percent to 29,225.
A sell-off in US Treasuries resumed as Fed officials gave no indication the US central bank would moderate or change its plans to aggressively raise interest rates to bring down high inflation.
Cleveland Fed President Loretta Mester said she does not see distress in U.S. financial markets that would alter the central bank's campaign to lower inflation through rate hikes that have taken the Fed funds rate to a range of 3.0 percent to 3.25 percent.
Data showed the number of Americans filing new claims for unemployment benefits fell to a five-month low last week as the labour market remains resilient despite the Fed's aggressive interest rate hikes.
"Good news is bad news in that today's job number again reiterates that the Fed has a long way to go," said Phil Blancato, head of Ladenburg Thalmann Asset Management in New York. "The fear in the marketplace is that the Fed is going to push us into a very deep recession, which will cause an earnings recession, which is why the market is selling off."
The yields on many Treasuries, which are considered virtually risk-free if held to maturity, now dwarf the S&P 500's dividend yield, which recently stood at about 1.8 percent, according to Refinitiv Datastream.
Meta Platforms ended lower after Bloomberg reported the Facebook-owner froze hiring and warned employees of more downsizing to come.
Airline carriers and cruise operators fell on cancelled or delayed trips after Hurricane Ian hit Florida's Gulf Coast with catastrophic force. (Reuters)