Dow Jones drops 832 points in third worst drop in history

Wall Street slumps as investors dump tech stocks

The Dow Jones Industrial Average fell 831 points, its worst loss in eight months.

The U.S. trade war with China has largely been brushed off by the markets, but the slide shows it may finally be taking a toll. Apple and Amazon both had their worst day in two and a half years.

Japan's Nikkei 225 added 0.2 percent, South Korea's Kospi dropped 1.1 percent and the Hang Seng in Hong Kong gained 0.1 percent.

Gold rose as sliding global stock markets prompted risk-wary investors to seek the metal, and a drop in U.S. Treasury bond yields helped push the dollar lower. She said they also fear that company profit margins will be squeezed by rising costs, including the price of oil.

"The market is not necessarily going to take out much from the yield path", Goncalves said.

But historically, a monthly move of one to two deviations, or 20 to 40 basis points now, would result in flat S&P 500 returns.

The broad-based S&P 500 slumped 3.3% to end at 2,786.46, while the tech-rich Nasdaq Composite Index plummeted 4% to finish the session at 7,427.74. Eastern time. It's on track for its fifth straight drop, which hasn't happened since right before the 2016 presidential election. Jeweler Tiffany, handbag makers Michael Kors and Tapestry tumbled between 4.9 and 7.2 percent.

USA crude fell 1.98 per cent to $71.72 per barrel and Brent was last at $81.30, down 2.15 per cent on the day.

Alibaba dropped 4.1 percent after Morgan Stanley and Raymond James cut their near-term profit estimates on the Chinese e-commerce company, citing a softer economic environment in China. Boeing lost 4 per cent to $370.04 and Alphabet, Google's parent company, gave up 3.2 per cent to $1,109.08. The FAANGs, spread over three sectors, were down between 1.4 percent and 5.4 percent.

The 10-year Treasury yield remained at 3.20 per cent, about where it was late on Tuesday, after earlier touching 3.24 per cent. Australia's S&P/ASX 200 slipped 2.4 percent to 5,906.00.

Bond yields and therefore interest rates have been rising for more than two years as the USA economy grew strong. Adams, of Bloomberg Intelligence, said investors have concerns about their future profitability, too.

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Earlier on Wednesday, Sears Holdings plunged on reports that the struggling retailer is preparing to file for bankruptcy. The stock fell 15 per cent to 50 cents.

Many investors now believe that the Federal Reserve's campaign to "normalize" monetary policy, reversing years of extraordinary support that included the quantitative easing bond buying program and keeping its overnight target very low, will push interest rates higher than previously thought.

Oil futures fell. USA crude gave up $1.27 to $71.90 a barrel. Brent crude, the global standard, lost 2.2 per cent to $83.09 a barrel in London.

Wholesale gasoline shed 2.7 per cent to $2.02 a gallon.

In small-caps, the Russell 2000 closed at 1,575.91 for a loss of -45.95 points or -2.83%. Natural gas rose 0.6 per cent to $3.28 per 1,000 cubic feet.

USA gold futures settled up $1.9, or 0.16 percent, at $1,193.4.

Amazon has soared 50 percent this year, but its stock has fallen 14 percent from its all-time high in early September. Copper fell 0.9 per cent to $2.78 a pound.

In London, the FTSE 100 was down by 1% as hopes of a Brexit deal lifted the pound - weakening the sterling value of earnings for numerous global index's multinational constituents.

The stock market as a whole, however, had solid reasons behind the fall: rising interest rates.

When investors expect rates to rise, the prices of bonds paying lower interest rates falls. Brazil's Bovespa lost 2.5 per cent and the Merval in Argentina sank 2.2 per cent.

The Japanese yen strengthened 0.01 per cent versus the greenback at 112.29. The euro rose to $1.1525 from $1.1496.

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