The Dow drops nearly 500 points as recession concerns rise, impacting major stocks like JPMorgan and Boeing
Stocks dropped sharply on Thursday, with the Dow Jones Industrial Average falling nearly 500 points due to rising recession fears, according to CNBC.
The Dow decreased by 494.82 points, or 1.21 percent, closing at 40,347.97. At its lowest point during the session, the index had lost 744.22 points, or about 1.8 percent.
The S&P 500 fell by 1.37 percent to close at 5,446.68, and the Nasdaq Composite declined by 2.3 percent to 17,194.15. The Russell 2000 index, which has seen recent gains, dropped by 3 percent.
Recent data has heightened concerns about a potential recession and the possibility that the Federal Reserve may be too slow in reducing interest rates. Initial jobless claims saw their largest increase since August 2023.
The ISM manufacturing index, which measures US factory activity, came in at 46.8 percent, indicating economic contraction and falling short of expectations. Following these reports, the 10-year Treasury yield fell below 4 percent for the first time since February.
These weak economic indicators came a day after central bank policymakers decided to maintain interest rates at their highest levels in two decades. Fed Chair Jerome Powell had provided some optimism by suggesting a possible rate cut in September.
“The data we have received since the Fed meeting suggests that concerns are growing about the economy not achieving a soft landing and the Fed hesitating too long,” said Tom Fitzpatrick, managing director for global market insights at R.J. O’Brien and Associates.
“The bond market indicates we’re behind the curve, and the Fed is now more willing to risk making a new mistake to avoid repeating past errors.”
Chris Rupkey, chief economist at FWDBONDS, observed that Thursday’s data pointed towards an economic downturn amid market volatility.
“The stock market is uncertain whether to celebrate or worry because, while three Fed rate cuts might occur this year and 10-year bond yields are dropping below 4.00 percent, recessionary pressures are intensifying,” Rupkey said.
Stocks most vulnerable in a recession were among the significant losers of the day, including JPMorgan Chase, which dropped by 2.3 percent, and Boeing, which declined by more than 6 percent.
