U.S. stock indexes plummeted on Thursday morning as investors spooked by the health of the global economy jettisoned stocks and fled to safe-haven assets.
All three major indexes were down more than 1 percent, led by financials, especially banks. All 10 major S&P sectors were lower.
Federal Reserve Chair Janet Yellen on Wednesday acknowledged tightening financial conditions and uncertainty about China and the risks they posed to the U.S. economy, but still kept open the possibility of further interest rate hikes.
Globally, stocks fell sharply on Thursday. The dollar hit a 16-month low against the yen and investors migrated to gold and top-rated bonds. U.S. Treasury security yields plunged to levels not seen since 2012 in some cases.
Prices on Fed fund futures, used to predict future policy rates by the Fed, surged as investors further cut back expectations of another rate hike anytime soon after the first U.S. rate hike in nearly a decade in December.
“The market is transitioning and attempting to stand on its own two feet. Central banks in general have been the market’s protectors over the last eight years,” said Jack Ablin, chief investment officer at BMO Private Bank in Chicago.