Dow Down Over 1,000 Points Over Two-Day Span

Why Howard Marks is cautioning investors

The S&P 500 index fell 4 points, or 0.1 percent, to 2,781. Companies that have been the biggest winners on the market the last few years, including technology companies and retailers, suffered steep declines. Investors see many of these countries as being vulnerable to higher US interest rates, which can pull away investment dollars. "I think the Fed is out of control", the president said to reporters in the Oval Office.

Stephen Innes of OANDA said that Trump's comments have put pressure on the dollar but "the severity of this equity rout could bring the hawkish Fed narrative into question".

"As stocks go up, tech goes up more than the stock market". Amazon skidded 4.8 per cent to $1,781.21 (U.S.). Boeing and Caterpillar have both fallen more than 5% this week as Trump continues to threaten additional tariffs, saying Thursday he could "do a lot more" in his trade war with Beijing. The International Monetary Fund cut its outlook for global growth this week, citing interest rates and trade tensions. It was at just 3.05 percent early last week and 2.82 percent in late August.

The drop in yields hurt banks, and JPMorgan Chase fell 3 percent to $1078.13 while Bank of America sank 3 percent to $28.36. Australia's S&P/ASX 200 slipped 2.4 percent to 5,906.00.

Investors may want to shift out of momentum and into more defensive stocks - companies that aren't as expensive and also pay healthy, stable dividends.

Innes, the Singapore-based head of Head of Trading for Asia Pacific with OANDA, attributed the slide to a combination of factors, including the possibility further interest rate hikes and the battle over tariffs between the USA and China.

The tumble came after the Dow Jones industrial average closed 831.83 points lower, its third-worst point decline ever, in NY trading on Wednesday amid concerns over a rise in interest rates.

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The S&P 500 and tech-heavy Nasdaq joined in Wednesday's carnage, falling 3.3 percent and 4.1 percent, respectively.

At 12:44 p.m., the Nikkei 225 average traded at 22,496.24, down 1,009.80 points, or 4.30 percent, from Wednesday's closing. The Dow and other major USA stock indexes fell more than 3%.

Apple and Amazon, the two most valuable companies in the S&P 500, each had their worst day in 2½ years. Amazon and Alphabet, respectively the second- and fourth-most valuable US companies, are in what's known as a "correction", a drop of more than 10 percent from a recent peak. That's still sharply higher than it was about a week ago, and earlier this week the yield on the 10-year note reached its highest level since mid-2011.

"It's a risk-off environment as investors are focusing on spiking yields and taking profits off the table as they are concerned about whether the bull market is actually coming to an end", said Ryan Nauman, market strategist at Informa Financial Intelligence in Zephyr Cove, Nevada. "The valuation of USA stocks, especially tech stocks, is still pretty high and there could be some profit taking actions now", Tan explained. The euro rose to $1.1525 from $1.1496.

US crude dropped 3 percent while Brent crude, the global standard, dropped 3.4 percent.

"There is more optimism that they will find some agreement between Britain and the European Union before Brexit", said Steve Englander, global head of G10 FX research at Standard Chartered Bank in NY.

Bear markets since 1975 have had far lower percentage drops at their bottom, even as markets have grown remarkably in inflation-adjusted dollars.

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