June 18 (UPI) — The Dow Jones Industrial Average plummeted more than 500 points in a broad-based sell-off Friday, wrapping up its worst week in nearly eight months as investors fretted over interest rates.
The Dow fell 533.37 points to 33,290.08, a 1.58% decline, while the S&P 500 dropped 55.41 points, or 1.3%, to 4,166.45.
The tech-heavy Nasdaq also ended significantly lower, declining by 130.97 points, or 0.9%, to 14,030.38.
For the week, the Dow was down by 3.5% — its sharpest weekly drop since October 30 and second straight weekly loss.
Analysts said the volatility was driven in part by remarks from St. Louis Federal Reserve President James Bullard, who told CNBC that it would be “natural” for the Board of Governors to respond in more “hawkish” way on interest rates if inflation continues to outpace expectations during the recovery from the COVID-19 pandemic.
“We were expecting a good year, a good reopening, but this is a bigger year than we were expecting, more inflation than we were expecting,” he said. “And I think it’s natural that we’ve tilted a little bit more hawkish here to contain inflationary pressures.”
His comments resonated with the market after similarly hawkish remarks by Fed Chairman Jerome Powell this week in which he said the central bank is planning to make two interest rate increases by the end of 2023.
Adding to the market’s negative momentum, Friday was also “quadruple witching day,” which marks the simultaneous expiration of single-stock options, single-stock futures, stock-index options and stock-index futures.
