U.S. stocks on Friday suffered the worst slide since the U.K.’s surprise decision to exit from the European Union, as hawkish comments from Federal Reserve officials slammed bond and equity markets.
The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA -0.07% closed down 394.46 points, or 2.1%, at an intraday low of 18,085.45, with all 30 blue-chip companies in the red, led lower by 3.3% drops in shares of Verizon Communications Inc. /zigman2/quotes/204980236/composite VZ +2.98% , Boeing Co. /zigman2/quotes/208579720/composite BA -2.65% , and Caterpillar Inc. /zigman2/quotes/203434128/composite CAT -0.51% .
The S&P 500 index /zigman2/quotes/210599714/realtime SPX +0.48% plunged 53.49 points, or 2.5%, to close at its intraday low of 2,127.81 with all 10 main sectors finishing lower. So-called defensive sectors—utilities and telecoms, which both finished off more than 3%—led the losses, while energy shares declined 2.8% amid a steep drop in crude-oil futures. Oil prices /zigman2/quotes/209726727/delayed CLV26 0.00% settled down 3.7% at $45.88 a barrel and
eanwhile, the Nasdaq Composite Index /zigman2/quotes/210598365/realtime COMP +1.29% shed 133.57 points, or 2.5%, to close at an intraday low of 5,125.91.
For the broader market, it was the worst session since June 24, when the Dow industrials cratered 3.4%, the S&P 500 plunged 3.6% and the Nasdaq Composite unraveled by 4.1%.
On Friday, the S&P 500 and the Dow fell below their 50-day moving averages.
Friday’s broad selloff puts the Dow industrials at a weekly loss of 2.2%, the S&P 500 at a 2.4% loss, and the Nasdaq at a 2.4% decline. For the month to date, the Dow is 1.7% lower, the S&P 500 is off 2%, and the Nasdaq down 1.7%.
Comments from Boston Fed President Eric Rosengren—a voter this year on the Fed’s interest-rate setting board—helped to contribute toe the selloff. He said on Friday that the U.S. central bank could resume gradual rate increases as the risks facing the economy are more in balance, reigniting Wall Street’s fears about the end of easy-money policies.
Rosengren’s comments drove the U.S. dollar /zigman2/quotes/210598269/delayed DXY -0.09% firmly higher, while the yield on the 10-year Treasury note /zigman2/quotes/211347051/realtime BX:TMUBMUSD10Y -5.15% jumped to levels not seen since before the U.K. referendum, known as Brexit.
A sharp jump in Wall Street’s fear gauge, the CBOE Volatility Index /zigman2/quotes/210598281/delayed VIX -3.78% , which surged by 39% to 17.50, highlighted the worries on the day. The VIX marked its largest one-day jump since June 24, and hit its highest level since June 28.
On the New York Stock Exchange, 19 stocks declined for each one advancing, with 98% of the session’s volume contributing to the selloff.
Wall Street losses followed declines for European /zigman2/quotes/210599654/delayed XX:SXXP -1.44% and Asian markets, which were unsettled by North Korea’s confirmation that it has successfully carried out a fifth nuclear test.
“When the market is near its top—as this market has been—any piece of bad news will results in a selloff,” said Thomas Siomades, head of Hartford Funds Investment Consulting Group.