It’s back to where it was in late 2020 and down from a peak of $68,990 late last year. Bitcoin tumbled more than 15 percent and dropped below $23,254, according to Coindesk. Some of the biggest hits came for cryptocurrencies, which soared early in the pandemic when record-low interest rates encouraged some investors to pile into the riskiest investments. The FTSE 100 in London dropped 1.8 percent. In Europe, Germany’s DAX lost 2.6 percent, and the French CAC 40 fell 2.9 percent. Stocks there were also hurt by worries about COVID-19 infections in China, which could push authorities to resume tough, business-slowing restrictions. In Asia, indexes fell at least 3 percent in Seoul, Tokyo and Hong Kong. The pain was worldwide as investors braced for more aggressive moves from a coterie of central banks. If the two-year yield tops the 10-year yield, some investors see it as a sign of a looming recession. The gap between the two-year and 10-year yields is also narrowing, a signal of increased pessimism about the economy in the bond market. The 10-year yield jumped to 3.29 percent from 3.15 percent, and the higher level will make mortgages and many other kinds of loans for households and for businesses more expensive.
It’s more than quadrupled this year and touched its highest level since 2008. The two-year Treasury yield shot to 3.23 percent from 3.06 percent late Friday, its second straight major move higher. bond yields to their highest levels in years. It’s all a whiplash turnaround from earlier in the pandemic, when central banks worldwide slashed rates to record lows and made other moves that propped up prices for stocks and other investments in hopes of juicing the economy. WATCH: Markets plunge amid fears of sharply higher interest rates Those would come on top of some already discouraging signals about the economy and corporate profits, including a record-low preliminary reading on consumer sentiment that was soured by high gasoline prices.
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No one thinks the Fed will stop there, with markets bracing for a continued series of bigger-than-usual hikes. Traders now see a 30 percent probability of such a mega-hike, up from just 3 percent a week ago, according to CME Group. That’s triple the usual amount and something the Fed hasn’t done since 1994. Some traders are even speculating the Fed on Wednesday may raise its key short-term interest rate by three-quarters of a percentage point. Its main method is to raise interest rates in order to slow the economy, a blunt tool that risks a recession if used too aggressively. The center of Wall Street’s focus was again on the Federal Reserve, which is scrambling to get inflation under control. Eastern time, and the Nasdaq composite was 3.9 percent lower. The Dow Jones Industrial Average was down 738 points, or 2.4 percent, at 30,653, as of 10:30 a.m. The S&P 500 was 3.3 percent lower in investors’ first chance for trading after getting the weekend to reflect on the stunning news that inflation is getting worse, not better. NEW YORK (AP) - Wall Street is tumbling even more Monday, sending the S&P 500 down more than 20 percent from its record, on worsening fears about a possible recession given how stubborn inflation has become.
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