Dow tumbles again as tech wreck continues

the Dow †INDU† opened down about 400 points, or 1.4%. S&P 500 †SPX† futures fell by 1.6%, and the Nasdaq Composite †COMP† lost about 2%.

Fed Chair Jerome Powell told investors last Wednesday afternoon that future rate hikes larger than a half percentage point are “not something the [Fed] is actively considering,” leading to a bullish surge in markets. The major indexes all grew by around 3%, and the S&P 500 and Dow had their best days in nearly two years. By Thursday investors decided they weren’t so keen on the changes, worried about the increasing chances that the Fed plunges the economy into a recession.

“I’ve been in the markets for 25 years and I’ve never seen anything like this,” said Danielle DiMartino Booth, CEO and chief strategist for Quill Intelligence, a Wall Street and Federal Reserve research firm. “It’s violent not just volatile.”

Mentions of ‘weak demand’ in earnings reports are now at their higher level since the second quarter of 2020, according to research by Bank of America analysts.

“Our guidance ratio, earnings revision ratio, and corporate sentiment reading all plummeted to the lowest since [the second quarter of 2020],” they wrote, “adding to recession concerns.”