As a result, stock indices around the world plunged and the United States (US) dollar continued to soar to a 20-year high.
Wall Street saw the Dow Jones Industrial average index fall 653.67 points or 1.99% at 32,245.7, the S&P 500 lost 132.1 points or 3.20% at 3,991.24 and the Nasdaq Composite was down 521.41 points or 4.29% at 11,623.25.
It was the first time since March 21, 2021 for the S&P to be below the 4,000 mark while the Nasdaq reached its lowest level since November 2020.
MSCI’s worldwide stock benchmark declined 3.09% after hitting its lowest level since December 2020 while emerging market shares lost 1.63%.
According to Wedbush Securities Los Angeles managing director of equity trading, Michael James, investors are seen trying to retain capital and try to raise cash based on deteriorating macroeconomic conditions.
Clearly, the slow growth conditions make investors look for all growth -related assets.
Generally, central banks around the world including in Britain, the US and Australia have raised interest rates in the past week, and this indirectly signals that there will be more tightening in the future.
Chris Zaccarelli, chief investment officer of the Independent Advisor Alliance, noted that the market will continue to re -evaluate inflation risks as the situation is expected to remain longer.
He added that the situation was exacerbated by the pressure of the economic slowdown caused by the closure in China and the war in Europe.
Meanwhile, U.S. Treasury yields eased after the 10 -year benchmark note hit a 3 -and -a -half -year high of 3.0397% with investors gearing up for consumer price data and a $ 103 billion government debt auction.
As for the currency market, investors looking for a safe-haven have turned to the dollar until it rose for 5 consecutive weeks, hitting a 20-year high before falling slightly at 0.77% with the Euro up 0.07% at $ 1.0558.
The Japanese yen strengthened 0.25% against the greenback at 130.24 per dollar.
Spot gold fell 6.45% at $ 1,852.58 per ounce and U.S. gold futures were down $ 0.94 at $ 1,857.10 per ounce.
Bitcoin also declines frequently on Wall Street.
