The stock market closed sharply lower, extending a weeklong slide, as the Dow Jones industrial average plunged more than 600 points.
Stocks ended their worst week in two years Friday, and the Dow’s drop was its biggest in percentage terms since June 2016.
Several giant U.S. companies dropped after reporting weak earnings, including Exxon Mobil and Alphabet. Apple and Chevron also fell.
Bond yields rose sharply after the government reported the fastest wage growth in eight years, stoking fears of inflation.
The Dow fell 665 points, or 2.5 percent, to 25,520.
The Standard & Poor’s 500 index dropped 59 points, or 2.1 percent, to 2,762. The S&P is down almost 4 percent since hitting a record high a week ago.
The Nasdaq fell 144 points, or 2 percent, to 7,240.
Investors have grown increasingly worried that a rapid rise in interest rates, spurred by higher inflation, could derail the market’s strong and calm ride upward. And they’re concerned the Federal Reserve will respond to higher inflation by raising interest rates more quickly than expected.
The prospect of higher interest rates, which can weigh on company earnings and stock prices, derailed the market’s strong start to 2018, pulling the indexes lower for much of this week.
“We’ve enjoyed low interest rates for so long, we’re having to deal with a little bit higher rates now, so the market is trying to figure out what that could mean for inflation,” said Darrell Cronk, head of the Wells Fargo Investment Institute. “The concern for the stock market is as interest rates go up so does the cost of debt service, the discount rate that you would use in factoring earnings growth for companies.”