US close: Stocks end session sharply lower

dl nyse new york stock exchange wall st street city finance dow jones nasdaq sp finance dollar dollars us usa united states of america 2 — New York Stock ExchangeSharecast photo / Josh White

Wall Street stocks were firmly in the red at the close on Friday amid concerns that the central bank's aggressive monetary policy may send the US economy into a recession.

At the close, the Dow Jones Industrial Average was down 1.62% at 29,590.41, while the S&P 500 was 1.72% weaker at 3,693.23 and the Nasdaq Composite saw out the session 1.80% softer at 10,867.93.

The Dow closed 486.21 points lower on Friday, extending losses recorded on Thursday as market participants continued to come to terms with the Federal Reserve's decision to hike interest rates yet again.

Major indices wrapped up trading on Friday much the same as they ended the previous session, with investors growing fearful of the Fed's 75 basis points interest rate hike and its prediction that short-term rates will go as high as 4.4% by the end of 2022. Multiple central banks across the globe also followed suit, implementing marked hikes despite potential repercussions for their economies.

On the macro front, a flash reading of S&P Global's US manufacturing PMI edged higher to 51.8 in September, up from 51.5 in August to beat market forecasts for a reading of 51.1, but was still the second-lowest reading since July 2020. Elsewhere, the services PMI rose to 49.2 in September from 43.7 a month earlier, easily beating market expectations for a print of 45.0.

Elsewhere, Federal Reserve chairman Jerome Powell warned that the central bank's attempts to engineer a "soft landing", in which it will slow growth enough to curb inflation but not so much as to cause a recession, now looks increasingly unlikely.

"The chances of a soft landing," Powell said, "are likely to diminish" as the Federal Reserve steadily raises borrowing costs to slow the hottest run of inflation in forty years. "No one knows whether this process will lead to a recession or, if so, how significant that recession would be."

No major corporate earnings were released on Friday.

Reporting by Iain Gilbert at Sharecast.com

Dow Jones - Risers

Home Depot Inc. (HD) $270.94 0.67%
Johnson & Johnson (JNJ) $166.72 0.32%
Honeywell International Inc. (HON) $0.00 0.00%
Dowdupont Inc. (DWDP) $0.00 0.00%
Amgen Inc. (AMGN) $226.97 -0.34%
Procter & Gamble Co. (PG) $135.58 -0.46%
Unitedhealth Group Inc. (UNH) $513.61 -0.74%
McDonald's Corp. (MCD) $245.95 -0.80%
Merck & Co. Inc. (MRK) $86.78 -0.83%
Travelers Company Inc. (TRV) $155.48 -0.97%