The U.S. stock market had its worst day since February, with major indices all plunging on rising interest rates and anxiety about tech investments, trade wars and the cost of Hurricane Michael.
The Dow 30 dropped more than 800 points, or 3.1%, to finish at 25,608.03. The S&P also retreated more than 3%, while the tech-heavy Nasdaq took the biggest hit, declining more than 4% to record its worst single-day drop in two years.
Media and tech companies went along for the stomach-churning ride, with the widespread carnage putting every single company in red figures. Traditional conglomerates CBS, Disney and Comcast all shed 3% of their value, while tech issues booked bigger losses. Netflix and Twitter each tumbled 8% and Amazon, Apple and Facebook were not far behind, at 5%, 4% and 4%, respectively. Streaming video pioneer Roku gave back more than 12% on the day.
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A senior White House official told CNBC that President Donald Trump, who has often pointed to rising stock markets at his campaign rallies, had been briefed about the market downturn. “This is a bull market correction. It’s probably healthy. This will pass and the U.S. economy remains strong,” the official said, according to a statement read by CNBC.
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Treasury yields hit 7-year highs, signaling rising interest rates and potential headaches for companies that borrowed extensively when money was cheap, only to face steep repayments in a higher-rate environment.
Investors and analysts have noted the length of the current economic boom, with sentiment increasing about a likely recession as the gravity of the market-based economy reasserts itself. As stocks have surged through most of this decade, markets have largely erased the damage from the financial crisis that lingered from 2008 to 2010, while prompting speculation about a new bubble.
Major economic reports have pointed to unemployment at a 50-year low and tax cuts beginning to take effect. While those are clear positives, they come eight years into a bull market, about as long as any has ever lasted.
The Dow, the S&P and the Nasdaq all hit record levels between Aug. 30 and Oct. 3, even as the U.S.-China trade policy dispute continued to cast a shadow over company earnings forecasts. Earnings season begins next week — for the media business, Netflix kicks things off on Tuesday.
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