US benchmarks were deep in negative territory by Thursday’s closing bell after US House of Representatives Speaker Paul Ryan said President Trump would not sign a temporary government funding resolution
The Dow Jones Industrial Average sank nearly 470 points to a 14-month low.
The S&P 500 fell around 40 points by the end of the trading day with Conagra Brands Inc (NASDAQ:CAG) and Twitter Inc (NASDAQ:TWTR) were among the top decliners.
The Russell 2000 was down about 1.2% by the closing bell.
Up north, the TSX slipped nearly 120 points after as drop in the US stocks offset gains in the materials segment.
1:30 PM: Dow plunges 450 points as concerns mount about economic outlook
US stocks slumped across the board in Thursday’s afternoon trading session, with technology stocks falling particularly sharply, after the Federal Reserve crushed optimism that a softer approach might be taken to interest-rate progression.
Also weighing on market sentiment was the US Congress’s lackluster efforts to make good on a funding bill before Friday’s deadline at midnight, which will prevent the US government’s partial shuttering.
A handful of disappointing earnings reports also posed a drag on markets, with Accenture shares dropping 5.6% to $142.71 after the consulting firm forecast second-quarter revenue below analysts- estimates.
Shares in the cruise operator Carnival also slipped by 9.7% to $49.66 after providing a first-quarter outlook that also falls short of estimates.
Technology stocks were also taking a battering and pushing into bear market territory, with the S&P tech sector down 2.2%, which was the most severe fall when assessed on a sector by sector basis.
As the afternoon wore on, the Dow Jones Industrial Average shed 450 points to 22,873, held back by Walgreens Boots Alliance, Walmart, United Health Group and Exxon Mobil.
The S&P 500 also shed 41 points to hit 2,464 while the tech-laden Nasdaq fell by 128 points to 6,509.
Up in Canada, Toronto’s TSX was off by 109 points at 14,154 as Proactive went to press while the Russell 2000 index of small-cap stocks shed 23 points points to hit 1,326.
10:02 AM: US stocks weaker as worries mushroom after Fed raises rates for fourth time in 2018
US stocks declined Thursday as the fourth interest rate increase by the Federal Reserve in 2018 seemingly underscored the weak economic outlook going into 2019.
Even after Fed Chair Jerome Powell said tightening will slow down next year, the central bank would continue to unwind its balance sheet at the current rate.
The Dow Jones Industrial Index slid 0.7% to trade at 23,168.
The S&P 500 shed 0.4% to 2,497. The Nasdaq index reversed to rise slightly to 6,651.
The Russell 2000 index of small-cap stocks fell 0.4% to 1,343.
In Canada, the TSX added 0.1% to trade at 14,283.
The FTSE in London, which was down at one point to a two-year low, pared its losses. It was recently off 0.4% to 6,737.
The US Senate took the first step to avert a partial shutdown of the government by passing a temporary spending bill, effectively punting the problem to a later date.
The US House of Representatives will take up the measure and if the measure is approved, the bill will go to US President Donald Trump for his signature.
That is not a sure thing because Trump had warned he will shut the government down unless Congress comes up with new money for his border wall with Mexico.
In Asia, the Nikkei 225 in Tokyo tumbled nearly 600 points to 20,392. But the key Shanghai Composite Index in China was only softer by 13 points to 2,536.
The Bank of Japan left its rates unchanged. BOJ governor Haruhiko Kuroda warned though of risks to the economic outlook and indicated the bank's readiness to ramp up stimulus if needed.
As widely expected, the Bank of England also left rates flat as uncertainty plagued the UK over Brexit.