Dow ends around 800 points lower after bond market flashes recession signal

Stocks tumbled Wednesday after the main measure of the U.S. yield curve briefly inverted, heightening worries about a potential recession. The Dow Jones Industrial Average DJIA, -3.05% dropped around 801 points, or 3%, to end near 25,479, according to preliminary figures, while the S&P 500 SPX, -2.93% dropped around 86 points, or 2.9%, to close near 2,841. The Nasdaq Composite COMP, -3.02% shed around 242 points to close near 7,774, a loss of 3%. Weak economic data out of the China and Europe had heightened worries about global economic growth, but a rally in the Treasury market that saw the yield on the 10-year note trade below the yield on the 2-year note for the first time since 2007 — a phenomenon seen as a potential recession indicator — accelerated a selloff in stock-index futures ahead of the opening bell. Stocks were under pressure throughout the trading session, posting broad losses that left all 11 S&P 500 sectors and all 30 components of the Dow in negative territory. Banking stocks, which are sensitive to yields and the shape of the curve, were hard hit, with the S&P 500 financial sector falling 3.6%.

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