U.S. stocks swooned for a second day Thursday after the Federal Reserve raised benchmark interest rates and said that it would continue to let its massive balance sheet shrink at the current pace. Fears of a government shutdown also sent stocks tumbling to new lows Thursday afternoon.
The Dow Jones Industrial Average fell 464.06 points to 22,859.6, bringing its two-day declines to more than 800 points and its 5-day losses to more than 1,700 points. The S&P 500 fell 1.5 percent to finish at 2,467.41 as technology stocks underperformed. The Nasdaq Composite fell 1.6 percent and closed at 6,528.41, briefly dipping into bear market territory amid big losses in Amazon and Apple. The Nasdaq is 19.7 percent below its recent high. Companies in the S&P 500 have lost a total of $2.39 trillion in market cap this month. The Cboe Volatility Index — one of the market's best gauges of marketplace fear — rose above 30.
The Dow and Nasdaq posted their lowest closes since October 2017, while the S&P 500 finished at its lowest level since September 2017.
The Dow and S&P 500, which are both in corrections, are on track for their worst December performance since the Great Depression in 1931, down more than 10 percent each this month. The S&P 500 is now in the red for 2018 by 7.7 percent.
Stocks fell to the low for the day after U.S. House of Representatives Speaker Paul Ryan announced that President Donald Trump would not sign a temporary government funding resolution.
For as bad as it was, it could have been worse. The Dow was down 679 points at its low.
The moves Thursday came one day after the Fed decided to hike its benchmark overnight lending rate by one quarter point in the prior session. The Dow fell more than 350 points following the Fed's decision and pushed the major indexes to new lows for the year.