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World markets fall on concerns about inflation and interest rates

Markets around the world fell on Friday as investors remained concerned about inflation, a recession and rapidly rising interest rates.

The S&P 500 fell 1.7 percent in afternoon trading, putting the index on track for a second straight weekly decline. Now it’s also negative for the quarter; if it persists through the end of the month, it would be the first time since 2008 that the index has recorded three consecutive quarters of losses.

The Dow Jones Industrial Average fell 1.6 percent, nearing the brink of a bear market, defined as a 20 percent drop from a peak.

The moves signaled “a continuation of concerns we’ve had all week,” said Ryan Detrick, chief market strategist at Carson Group, namely that “global central banks led by the Fed are raising rates sooner than expected.” we thought to fight inflation”. and probably leaving the higher rates for longer.”

In a research note, analysts at Goldman Sachs slashed their year-end forecast for the S&P 500 to a level that implies a modest drop from current prices, where analysts expect it to hold through the first half of next year. .

Inflation is more persistent than expected, the analysts wrote, leading them to forecast the Federal Reserve would raise rates more than previously assumed, which is typically bad for stocks. But “the picture is unusually murky,” they said.

The yield on the 10-year Treasury note, a benchmark for borrowing costs, rose slightly, extending an earlier rise after the Fed announced another large rate hike on Wednesday.

In Europe, the Stoxx 600 fell 2.3 percent, down just over 20 percent from its January high, confirming a bear market. Markets in Britain were particularly affected by details of new government policies on tax and spending cuts.

Japan’s Nikkei 225 closed down about 0.6 percent, and in Hong Kong, the Hang Seng fell about 1.2 percent.

Reflecting concerns about economic growth, the price of West Texas Intermediate crude oil, the US benchmark, fell more than 5 percent, falling below $80 a barrel for the first time since January. . The dollar, often a safe haven for investors in turbulent times, gained more than 1 percent against a basket of currencies from the United States’ major trading partners.

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