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The Dow tumbles more than 600 points

traders

  • Stocks fell Wednesday as Wall Street sweats over global growth prospects and a bond selloff.
  • The 2-year yield hit its highest level since 2008.
  • Trade-sensitive industrial stocks also fell as tensions between Washington and Beijing persisted.

Stocks fell Wednesday as concerns about global economic growth and ongoing trade tensions continued to hang over Wall Street and after the bond market resumed a sell-off that started last week.

Technology companies were among the biggest losers, with the Nasdaq Composite falling more than 3% to 7,498.26. The Dow Jones industrial average dropped as many as 607 points to 25,824.91 at its lows. On track for its steepest loss since June, the S&P 500 shed nearly 2% to 2,823.44. 

Elsewhere, shares of Sears plummeted more than 37% after a report said the cash-strapped retailer could file for bankruptcy protection as soon as this week. 

US government bonds resumed a sell-off after yields surged to multiyear highs last week, with the two-year yield touching 2.906%, its highest since June 2008. With a humming US economy, the Federal Reserve is expected to continue hiking interest rates. The central bank has increased rates three times this year and eight times since the financial crisis.

On Tuesday, the International Monetary Fund downgraded its outlook for the world economy. Citing concerns about trade and emerging markets, the international lender lowered its global growth forecast for this year and next in a report. 

An ongoing conflict between Washington and Beijing weighed on large-cap industrial stocks, including Boeing (-4%) and Caterpillar (-3%). When asked by a reporter Tuesday if he was ready to place additional tariffs on Chinese goods, President Donald Trump replied: "Sure, absolutely." 

A closely-watched inflation measure in the US rose for the first time since June, according to the Labor Department. Partly driven by a jump in transportation costs, the producer-price index rose a seasonally adjusted 0.2% in September from a month earlier. The rebound was in line with expectations.

On the commodities front, oil prices fell as supply concerns took a backseat to warnings of dampened growth around the world. Bloomberg reports Hurricane Michael, one of the worst US hurricanes on record that is making landfall in Florida, has veered east of oil and gas platforms. West Texas Intermediate was trading down more than 2% to around $73 per barrel.

US markets mirrored risk-off sentiment around the globe, with European stocks having also ended sharply lower. Italy’s ruling coalition has been clashing with EU officials over its budget, saying Wednesday it wouldn't "backtrack"  on plans to increase deficit spending.

And a look at the upcoming economic calendar: 

  • Monthly inflation numbers are out in the US. 
  • Earnings season kicks off with reports from JPMorgan Chase, Citigroup and Wells Fargo.
  • The International Monetary Fund and the World Bank hold an annual gathering in Indonesia.

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