Dow plunges more than 600 points to end worst week in two years

The Dow Jones Industrial Average sunk more than 665 points Friday as interest rates rose, its worst decline in nearly two years.

The Dow closed Friday at 25,520 points, more than 1,000 points lower than last Friday’s record high close at 26,616, cementing the week’s losses. It was the biggest single drop in a day for the Dow since June 2016.

The S&P 500 and Nasdaq also sunk Friday by 2.1 percent and 1.9 percent, respectively. 

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Stocks seem to be coming back to earth after a year of record-breaking gains under President Trump. Investors are bracing for three Federal Reserve rate hikes this year as the bank aims to bring interest rates back up to historically neutral averages.

Interest rates on Treasury bonds spiked upward after the monthly employment report showed the economy added 200,000 jobs in January, more than expected, and the strongest wage growth since the 2008 recession. The jobs report fueled investors’ concerns that the Fed would move quickly to neutralize interest rates, coaxing money out of the market. 

Stocks have skyrocketed over the course of Trump’s first year in office upon booming consumer confidence and the promise of a major corporate tax cut. Trump and his aides have taken credit for the massive rise, calling it a referendum on and reflection of their economic agenda.

Analysts didn’t expect the stock market’s rough stretch to trigger a massive correction but had been warning earlier in the week of investors seeing an end to the Trump boom.

Updated at 4:33 p.m.