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(Reuters) -The blue-chip Dow Jones Industrial Average fell 20% from its peak close in January and was on track to confirm a bear market on Friday, as investors shunned risk assets on fears of a recession triggered by a rapid pace of interest rate hikes.
If the index closes 20% below its all-time closing high of 36,799.65 points hit on Jan. 4, it would confirm a bear market, according to a widely used definition.
The Dow would be the last of the three main indexes to confirm a bear market. The S&P 500 hit that milestone in June and the Nasdaq in March.
The three main indexes were also testing their June lows, a fall below which would push them to the levels last seen nearly two years ago. The Dow and the S&P 500 hit a near two-year low during the session on Friday.
The renewed selling pressure comes in a week that saw the U.S. Federal Reserve raise interest rates by three-quarters of a percentage point for a third straight time this year and a vow to keep going until inflation is tamed.
It has been a tumultuous year for Wall Street with Russia’s invasion of Ukraine also adding to investors woes.
The Dow is down 19% this year, while the S&P 500 has lost 23% and the Nasdaq has shed 31%.
Heightened fears of a U.S. downturn next year and its impact on corporate profits has prompted brokerages to downgrade their year-end price targets for the S&P 500.
At 13:00 p.m. ET, the Dow Jones Industrial Average was down 597.85 points, or 1.99%, at 29,478.83, the S&P 500 was down 79.06 points, or 2.10%, at 3,678.93, and the Nasdaq Composite was down 231.84 points, or 2.09%, at 10,834.96.
