Traders work on the trading floor at the New York Stock Exchange (NYSE) in Manhattan, New York City, U.S., September 13, 2022. REUTERS/Andrew Kelly NE

Stocks tumble, dollar soars and bonds plunge as recession fears grow

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2022-09-23 20:30:15

Traders work on the trading floor at the New York Stock Exchange (NYSE) in Manhattan, New York City, U.S., September 13, 2022. REUTERS/Andrew Kelly

NEW YORK/LONDON, Sept 23 (Reuters) - U.S. and European stocks tumbled on Friday, the dollar scaled a 22-year high and bonds sold off again as fears grew that a central bank prescription of raising interest rates to tame inflation will drag major economies into recession.

The Dow (.DJI) was close to confirming a bear market as a deepening downturn in business activity across the euro zone, and U.S. business activity contracting for a third straight month in September, left Wall Street wallowing in a sea of red.

British assets weakened further after the UK government announced huge debt-financed tax cuts that will boost borrowing, sending UK bond yields vaulting higher in their biggest daily increases in decades. read more

The euro plummeted to a 20-year low and sterling to a 37-year low, while the dollar soared after the Federal Reserve this week signaled rates would be higher for longer.