Global stock markets are falling as concerns about the economy intensify.
Following big losses in the US and Europe, Asian stocks sank on Friday as concerns about the economy grew following a series of rate hikes throughout the world.
The UK and Switzerland raised interest rates on Thursday, a day after America’s central bank announced its steepest interest rate rise since 1994.
Policymakers are raising rates to slow demand in hopes of easing some of the pressures pushing up consumer prices.
Investors are concerned that the actions will cause a prolonged downturn in the global economy.
“The Federal Reserve is going to hike interest rates until policymakers break inflation, but the risk is that they also break the economy,” said Ryan Sweet of Moody’s Analytics after the US rate rise was announced.
Markets had already been in shaky territory, with the S&P 500 down more than 20% from its January high ahead of the US rate hike this week.
On Friday, Japan’s Nikkei was 1.5% lower, while Australia’s main stock market index was down by more than 2%.
That occurred following a sell-off in the US on Thursday, with the S&P 500 dropping 3.2 percent and the tech-heavy Nasdaq dropping over 4%.
For the first time since January 2021, the Dow Jones Industrial Average fell more than 2.4 percent, falling below 30,000 points.
Few companies were spared, with firms reliant on discretionary spending, such as Nike and airlines, among those hardest hit.
Energy companies, which would also see demand fall in the event of an economic slowdown, also dropped.
Shares in Tesla fell by 8.5% after the firm unveiled price increases following rising costs. The electric carmaker’s autopilot features are also under scrutiny by US road safety regulators.
Spotify also sank 7%, a day after the streaming giant said it was slowing hiring in the face of economic uncertainty, becoming the latest big company in the tech sector to announce such a move.
The FTSE 100 ended Thursday down more than 3% in the UK, where the Bank of England warned that inflation could exceed 11% this year, while the FTSE 100 and 250 were marginally up in early Friday trade.
After warning investors that inflationary pressures were impacting shopping behavior, Asos, a British online apparel company, dropped by 32.5%.
On Thursday, Germany’s Dax index sank more than 3%, while France’s Cac 40 fell 2.4 %, but both markets were up on Friday morning.
The Stoxx 600 index fell to its lowest level since February 2021.