Stocks have their worst day in months; Dow drops 800-plus points

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The CBOE Volatility Index, or VIX, a market barometer often dubbed Wall Street's fear gauge, surged almost 40%.

The S&P 500 also fell 3.3 percent, marking its fifth straight decline, and the Nasdaq declined more than 4 percent, its worst percentage decline since June 2016.

US stocks are tumbling for the second consecutive day as the market's recent downturn gets worse.

Bond yields and therefore interest rates have been rising for more than two years as the US economy grew strong.

Stock prices have been hurt by rising interest rates, which have boosted Treasury yields over the last week.

President Donald Trump directly blamed the Fed for the sell-off and called the increases "ridiculous", a move that breaks precedent and that can cast doubt on the independence of a central bank.

Stephen Innes of OANDA said that Trump's comments have put pressure on the dollar but "the severity of this equity rout could bring the hawkish Fed narrative into question".

"The market is not necessarily going to take out much from the yield path", Goncalves said. Investors see many of these countries as being vulnerable to higher US interest rates, which can pull away investment dollars.

"It is a ideal storm for technology right now with the tariff war with China and weaker demand for chips", Nauman said.

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The jump in yields came a day after the International Monetary Fund slashed its global growth forecast on worries about trade wars and weakness in emerging markets. Apple shares fell 1.2 percent. Australia's S&P/ASX 200 slipped 2.4 percent to 5,906.00.

An ongoing conflict between Washington and Beijing weighed on large-cap industrial stocks, including Boeing (-2.5%) and Caterpillar (-1.6%).

Wall Street stocks plunged Wednesday, with major indices losing more than three percent in a selloff prompted by the sudden jump in US interest rates.

In its sixth consecutive day of declines, the S&P closed down 2.1 percent after shedding 3 percent in Wednesday's session.

At 12:44 p.m., the Nikkei 225 average traded at 22,496.24, down 1,009.80 points, or 4.30 percent, from Wednesday's closing. It's fallen 7.5 percent in just five days.

The Dow Jones Industrial Average fell 545 points after dropping 831 points Wednesday. Many stock-market observers pin the start of the current bull market, the longest since World War II, at March 9, 2009. Amazon skidded 6.2 percent to $1,755.25 and Alphabet, Google's parent company, gave up 4.6 percent to $1,092.16. That's still sharply higher than it was about a week ago, and earlier this week the yield on the 10-year note reached its highest level since mid-2011.

Tech leaders Amazon (AMZN), Facebook (FB) and Netflix (NFLX) all helped lead the market lower Wednesday while stodgier companies like food companies Smucker (SJM) and General Mills (GIS), gold miner Newmont (NEM) and bargain retailers Dollar General (DG) and Dollar Tree (DLTR) finished the day higher.

The Japanese yen strengthened 0.01 per cent versus the greenback at 112.29.

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