Dow Jones drops 404 points as Wall Street takes another hit

NEW YORK, New York – A day after a massive surge, U.S. stock markets caved in on Friday, sending all the major indices well into the red. The U.S. dollar, meantime, creamed all major currencies.

A global financial crisis appears to be taking shape, with inflation out of control, interest rates being spiked aggressively, and a world recession looming. On Friday, British Prime Minister Liz Truss sacked her chancellor (treasurer). The U.S. dollar surged once more after U.S. Treasury 10-year yields jumped the 4 percent hurdle. On Thursday, U.S. CPI figures released for September showed them rising more sharply than expected.

“With core CPI still moving in the wrong direction and the labor market strong, the conditions are not in place for a Fed policy pivot, which would be one of the conditions for a sustained rally in the equity market,” UBS global wealth management chief investment officer Mark Haefele said in a Friday note.

“Moreover, as inflation remains elevated for longer and the Fed hikes further, the risk increases that the cumulative effect of policy tightening pushes the U.S. economy into recession, undermining the outlook for corporate earnings.”

The Dow Jones industrials dived 403.89 points or 1.34 percent to 29,634.83.

The Nasdaq Composite shed 327.76 points or 3.08 percent to 10,321.39.

The Standard and Poor’s 500 dropped 86.84 points or 2.37 percent to 3,583.07.

On foreign exchange markets, the U.S . dollar roared ahead. The British pound tumbled to 1.1182 by the New York close Friday. The Australian dollar lost more than a cent to 0.6205, having fallen earlier to 0.6194. The Japanese yen was sharply lower at 148.59.

The euro fell to 0.9727. The Swiss franc crumbled to 1.004. The Canadian dollar dived to 1.3880.

Overseas, the FTSE 100 in London advanced 0.12 percent. The German Dax was up 0.67 percent, while in Paris, France, the CAC 40 climbed 0.90 percent.

In Japan, the Nikkei 225 surged 853.34 points or 3.25 percent to close Friday at 27,090.76.

South Korea’s Kospi Composite gained 49.68 points or 2.30 percent to 2,212.55.

The Australian All Ordinaries jumped 114.10 points or 1.67 percent to 6,945.60.

In New Zealand, the S&P/NZX 50 climbed 50.61 points or 0.47 percent to 10,868.09.

The Hang Seng in Hong Kong added 198.58 points or 1.21 percent to 16,587.69.

China’s Shanghai Composite rose 55.63 points or 1.84 percent to 3,071.99.

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