New York stock markets closed on Friday with significant losses, with the Dow Jones slipped to its lowest level since late 2020, amid fears of a recession fuelled by interest rate hikes.
At the same time, daring budget plans by the United Kingdom added to concern that inflation would continue to rise, despite interventions by central banks to contain price increases.
The Dow Jones Industrial Average fell 1.6% to 29,590.41 points, its lowest level since late 2020.
The broader S&P 500 lost 1.7% to end the day on 3,693.23 points, its lowest level since June 2022.
The Nasdaq lost 1.8%, finishing on 10,867.93 points. This was also its lowest level since June.
New British Chancellor of the Exchequer Kwasi Kwarteng on Friday announced significant tax cuts combined with additional spending to help businesses and households with their energy bills.
As a result, the country will need to borrow tens of billions of pounds, which threatens to fuel inflation, according to critics.
Interest rates on government debt also continued to rise, meaning the bonds themselves are depreciating. Rising interest rates are generally unfavorable for the valuation of shares.
The US dollar reached an all-time high, while the euro fell to its lowest level since 2002. The European currency lost 1.4% against the dollar, falling to $0.9696, while the British pound reached its lowest level in 37 years.
Oil producers Chevron and ExxonMobil and oil suppliers Schlumberger lost up to 8.5%.
Oil prices are also falling on fears of economic contraction, with decreasing demand for the fuel. A barrel of US oil was worth less than $80 for the first time since the war in Ukraine: the price fell 5.4% to $78.97 a barrel.
Brent oil fell 4.5 percent to $86.38 a barrel.