Stocks fell sharply in morning trading on Wall Street
Friday amid more signs that the global economy is weakening, just as central
banks worldwide raise the pressure even more with additional interest rate
hikes.

The S&P 500 fell 63.41 points or 1.7% to 3694.58 after
a preliminary report showed that US business activity is still shrinking,
though not quite as bad as in earlier months. The benchmark is on track for its
fifth losing week in the last six. The Dow Jones Industrial Average fell 403
points or 1.34% to 29,668. The Nasdaq fell 216.07 points or 1.95% to 10,850.73.

Also Read | Apple set to replace Pepsi as sponsor of next Super Bowl Halftime show

US crude oil prices slipped 5.6%. Crude oil prices plunged
amid concerns that a weaker global economy will burn fuel.

The Federal Reserve and other central banks around the
world aggressively raised interest rates this week in hopes of curbing the high
inflation battering global economies. But such moves also put the brakes on
their economies, threatening recessions as growth slows worldwide.

Also Read | Apple’s 16.02. update fixes grinding noises, permission bugs and more

Cryptocurrency prices also fell sharply as higher interest
rates tend to hit hardest the investments that look the priciest or the
riskiest. Even gold fell in the worldwide rout, as bonds paying higher yields
make investments that pay no interest look less attractive.

The Fed on Wednesday raised its benchmark rate by 75 basis
points, taking it to a range of 3% to 3.25%. It expects the benchmark rate to
be 4.4% by the year’s end, a full point higher than predicted in June.

Also Read | How the US Fed rate hike impacts your savings and loans?

Treasury yields, which affect rates on mortgages and other
kinds of loans, have jumped to multiyear highs as interest rates rise. The
yield on the two-year Treasury, which tends to follow expectations for Fed
action, rose to 4.17% from 4.12% late Thursday. It is trading at its highest
level since 2007. The 10-year Treasury yields, which help determine mortgage
rates, rose to 3.72% from 3.71%.

Also Read | How to survive a market crash

Central banks in Britain, Switzerland, Turkey, and the
Philippines all hiked rates after the Federal Reserve raised its key rate on
Wednesday for a fifth time this year and indicated more increases in the coming
months.