Stocks on Wall Street tumbled Thursday following the latest reminder that central banks now care more about fighting inflation than propping up markets. The S&P 500 sank 2.4% to 4,017.82, putting it on track for its ninth losing week in the past 10. The Dow Jones Industrial Average fell 1.9% to 32,272.79, and the Nasdaq composite lost 2.7%, falling to 11,754.23. Wall Street's losses accelerated late in the day, as investors got their final opportunities to make trades before a highly anticipated report on US inflation due Friday morning. The S&P 500's drop more than doubled in the last hour of trading, the AP reports.
The weakness for markets started on the other side of the Atlantic after the European Central Bank said it would raise interest rates next month for the first time in more than a decade. Another hike is set for September, possibly by double July's increase, and the central bank will halt its bond-buying program next month. It marks a "sea change" in policy for the European Central Bank, according to Marilyn Watson, head of global fundamental fixed income strategy at BlackRock. And it's part of a growing global tide where central banks are removing ultra-low interest rates that goose borrowing, economic growth, and stock prices. Instead, they've swung their focus toward raising interest rates and making other moves to slow growth in order to knock down high inflation.
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