US stocks end down over 1% with higher Fed hike risk, recession fears

ISTANBUL

US stocks fell more than 1% to close Tuesday on a lower note amid a rising risk that the Federal Reserve may deliver a higher rate hike next week than anticipated.

The Dow Jones Industrial Average fell 350.76 points, or 1.03%, to close at 33,596.34. The S&P 500 fell 57.58 points, or 1.44%, to 3,941.26.

The tech-heavy Nasdaq plummeted 225.05 points, or 2%, to 11,014.89.

The blue-chip Dow dropped nearly 500 points Monday and the Nasdaq shed almost 2% as positive services sector figures fueled fears that the Fed may raise rates higher than expected.

The central bank's aggressive monetary tightening could force the US economy into a recession next year, according to most economists.

JPMorgan Chase CEO Jamie Dimon said earlier Tuesday that record inflation and the Fed's monetary policy may derail the US economy and cause "a mild or hard recession" next year.

The VIX volatility index, also known as the fear index, soared 6.6% to 22.13. The 10-year US Treasury yield, however, fell 1.9% to 3.531%.

The dollar index rose 0.2% to 105.55, around its highest in 20 years, while the euro lost 0.2% to $1.0470 against the greenback.

Precious metals were mixed, with gold adding 0.2% to $1,772 per ounce but silver falling 0.2% to $22.20.

Oil prices plummet more than 3%. Global benchmark Brent crude was trading at $79.55 per barrel for a loss of 3.8%, while US benchmark West Texas Intermediate crude was around $74.34, down 3.4%.