Dow drops 300 points, breaks below 30,000 on fear the Fed is overdoing its

Stocks slumped on Friday and were on pace for another losing week as investors feared the Federal Reserve’s aggressive hiking campaign to fight inflation will lead to an economic downturn.

Dow Jones Industrial Average futures fell by 340 points, or 1.1%, while the S&P 500 slid 1.3%. The Nasdaq Composite lost 1.2%.

Friday marked the fourth negative session in a row for the major averages, with the Dow falling below its June closing low and the 30,000 mark. The Fed on Wednesday enacted another super-sized rate hike of 75 basis points and indicated it would do another at its November meeting.

Bond yields have soared this week following the Fed’s actions, with the 2-year and 10-year Treasury rates hitting highs not seen in over a decade.

Stocks positioned to suffer the most in a recession have led this week’s losses with the S&P 500’s consumer discretionary and real estate off by at least 6% and energy down more than 7%. Growth stocks including big technology names Apple, Amazon, Microsoft and Meta Platforms fell at least 1% each.

Goldman Sachs cut its year-end S&P 500 target because of rising rates, predicting at least 4% downside from here.

Investors on Friday continued to assess whether the Fed’s recent moves signal a downturn ahead, with many believing or beginning to accept that a recession is in fact on the horizon.

“Based on our client discussions, a majority of equity investors have adopted the view that a hard landing scenario is inevitable and their focus is on the timing, magnitude, and duration of a potential recession and investment strategies for that outlook,” wrote Goldman Sachs’ David Kostin in a note to clients.

Major averages are on pace for their fifth decline in the last six weeks and on track close out the week with losses. The Dow has given up about 3.5% this week, while both the S&P and Nasdaq have fallen 4.4% and 4.6%, respectively.

Costco was down about 3%. Despite posted fiscal fourth-quarter revenue and earnings that topped analysts’ expectations, it is seeing higher freight and labor costs.

In other news, the pound hit a fresh more than three-decade low against the U.S. dollar after a new U.K. economic plan that included a slew of tax cuts rattled markets.