The market’s rally was short-lived as stocks tumbled on Thursday (June 16), amid fears that a recession is looming. The Dow Jones Industrial Average plummeted by 740 points, closing below 30,000 for the first time since January 2021. The S&P 500 closed down by 123 points while the Nasdaq finished the day 453 points in the red.
The drastic sell-off comes one day after the markets rebounded following the Federal Reserve’s announcement of a 0.75% interest rate hike. Investors are skeptical that the Fed’s actions will be able to stave off a recession.
“The Fed has a very tight needle to thread here and I think investors and the market, in general, are losing a good deal of confidence that the Fed might be able to do that,” said Ryan Detrick, chief market strategist at LPL Financial, according to CNBC. “The truth is, the Fed is probably behind the eight ball. They should have been hiking more aggressively — probably starting late last year looking back — and the market is realizing that.”