The Dow Jones Industrial Average fell 630.97 points, or 2.01 percent, to 30,761.82. The Nasdaq fell 416.11 points, or 3.67 percent, to 10923.91. The S&P 500 fell 113.02 points, or 2.90 percent, to 3787.84.
On Monday, MSCI's all-country world index fell more than 20 percent from its November 2021 closing record. Us bond yields soared and the yen nearly collapsed. Cryptocurrencies sold off sharply, with Bitcoin falling below $24,000 for the first time since December 2020, down nearly 10% on the day.
The yield on two-year Treasury notes rose 15 basis points to 3.2 per cent on Monday, the highest since 2007, amid widespread investor bets that the Fed may have to raise interest rates more aggressively to curb inflation. The yield on the 10-year Treasury note hit 3.24%, its highest level since October 2018.
Semiconductor stocks including Marvell Technologies, Nvidia, STMICROELECTRONICS, AMD, NXP, Microchip, GlobalFoundries, And Texas Instruments all fell, with Tesla down more than 7%, Apple down 3.83%, and Boeing down more than 9%.
Goldman Sachs economists expect that if the Fed raises rates by 50 basis points in June, it will do the same at its September meeting. With that in mind, David Kostin, chief equity strategist at Goldman Sachs, warned that the bottom is still far from being reached.
Barclays economists said us inflation data could be shockingly high, meaning the Fed is more likely to raise interest rates by 75 basis points this week rather than 50 basis points.