Stocks tumbled on Friday as global growth fears and the Federal Reserve's more cautious economic forecast sparked investor angst into the weekend.
The Dow Jones Industrial Average sank to its session lows heading into the close and finished down 460.19 points at 25,502.32. Bank stocks led the decline thanks to a sharp pullback in long-term Treasury yields. The S&P 500 fell 1.9 percent to 2,800.71, its biggest one-day drop since Jan. 3. The Nasdaq Composite declined 2.5 percent to 7,642.67 as shares of Facebook, Amazon, Netflix, Alphabet and Apple all closed lower.
"There's a host of worries out there and those worries continue to mount," said Peter Cardillo, chief market economist at Spartan Capital Securities. "The fear of recession is increasing."
"As a result, we have a market that is rethinking some of the optimism that was priced in."
Sending bank stocks lower was an inversion of the so-called yield curve. The spread between the 3-month Treasury bill yield and the 10-year note rate turned negative for the first time since 2007, thus inverting the curve. An inverted yield curve occurs when short-term rates surpass their longer-term counterparts, putting a damper bank lending profits. An inverted curve is also considered a recession indicator.
Citigroup fell more than 4 percent. Goldman Sachs, Morgan Stanley, J.P. Morgan Chase and Bank of America all declined at least 2.9 percent.