The Dow Jones fell almost 500 points to more than a years lows as concerns grew over a partial government shutdown after US President Donald Trump signaled he would not sign a spending bill without funds for a border wall.
Shares had already been plunging since the Federal Reserve raised its benchmark lending rate on Wednesday, despite warnings from Trump that it would be a “mistake” to do so.
Trump is seeking $5 billion to build a proposed wall along the southern border, which has prompted chaos in the run-up to the Christmas holiday as members of Congress fight over the border security issue and try to keep the government running.
As of 2.20pm, Thursday in New York, the Dow Jones Industrial Average was down more than 2.7 percent to 22,665 — the first time the blue-chip index traded below 23,000 in about 14 months. The steep drop brought the losses since Friday to more than 1,900 points. The S&P 500 was down 2.5 percent while the Nasdaq plunged 2.6 percent.
Former chairman of the US Federal Reserve Alan Greenspan warned investors this week to “run for cover” and get ready for a painful correction in the stock market.
Concerns have mounted over the slowing global economy and ongoing trade disputes between the US and China that have kept stocks in decline since October.
Stocks stabilized slightly on Tuesday after a big drop on Wednesday, but overall Wall Street is suffering the worst start to December since 1980 and stocks are showing no signs of real recovery yet, with the Dow and S&P now headed toward their worst final month since the Great Depression.