Stocks fell sharply Friday afternoon, with the Dow Jones Industrial Average down nearly 1,000 points, marking its worst day since October 2020.
The Dow fell 981 points, or 2.8%, on Friday afternoon, placing it down 1.9% for the week, its fourth straight weekly decline and its ninth losing week of the last 11.
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According to a CNN Business report, all 30 stocks in the Dow ended the day lower, led by Verizon, which fell more than 5.5%, and Caterpillar, which plunged 6.5%. Goldman Sachs, Home Depot and Visa were also big downside contributors.
Shares of Gap Inc. plunged 18% on Friday as well, as the market reacted to the dismissal of Old Navy CEO Nancy Green on Thursday amid a revised lower guidance for the first quarter of 2022. The company now expects approximately low to mid-teens year-over-year declines in the first quarter fiscal 2022. Its prior guidance called for mid- to high-single-digit year-over-year declines.
“As we look to seize Old Navy’s potential, particularly amidst the macro-economic dynamics facing our industry, we believe now is the right time to bring in a new leader with the operational rigor and creative vision to execute on the brand’s unique value proposition,” Gap Inc. CEO Sonia Syngal said on Thursday.
What’s more, the S&P 500 was 2.8% lower on Friday, for its worst day since March, and the Nasdaq Composite ended the day down 2.6%.
The losses follow Federal Reserve chair Jerome Powell’s remarks at a panel hosted by the International Monetary Fund on Thursday, where he signaled that a 50-basis-point rate increase was “on the table” for May, when the U.S. central bank holds its next policy-setting meeting. The Fed chair reiterated this hike is “absolutely essential” to combat inflation.
Soaring inflation has been a concern for months now, but this news follows last week’s report from the Bureau of Labor Statistics which stated that consumer prices rose by 8.5% in March compared with a year ago. This number was up from the 7.9% growth in February and represented the highest inflation rate since the 12-month period ending in December 1981.
As for footwear, prices grew 6.6% in March, year over year, according to data from the Footwear Distributors and Retailers of America (FDRA). This marks the third-fastest year-over-year increase in about 33 years, trailing behind February’s 7% increase and May’s 7.1% increase.
This rise in prices was finally addressed by the Federal Reserve in March when it raised its policy interest rate by 25 basis points, the first hike in more than three years.