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Major U.S. stock indexes traded below their June lows Friday, with the blue-chip Dow Jones Industrial Average flirting with a fall into bear market territory, capping an ugly week for global equities as investors reacted to central banks sharply raising interest rates in an effort to rein in high inflation.
The Dow Jones Industrial Average
DJIA,
was down around 615 points, or 2%, near 29,461 Friday afternoon, trading below its June 17 closing low of 29,888.78, after dipping as low as 29,356.53. A finish at or below 29,439.72 would mark a 20% fall from the DJIA’s record close of 36,799.65 set on Jan. 4, which would meet the widely used definition of a bear market.
The big question, however, remains around the broader S&P 500 index
SPX,
and the potential for the more closely followed large-cap benchmark to take out its June 16 closing low at 3,666.67 or its June intraday low just below 3,637. The S&P 500 was down 80 points, or 2.1%, at 3,677 after trading as low as 3,662.82.
Global equities were down sharply early Friday, with U.S. stock suffering steep losses on Wall Street when the market opened. The Federal Reserve earlier this week delivered another outsize interest rate hike and signaled it would drive rates higher than market participants had previously anticipated. A number of other global central banks also delivered rate increases this week, underlining investor worries about the economic outlook.
See: Fed will tolerate a recession, and 5 other things we learned from Powell
