Tech firms lead the drop as US stock markets head for worst month in nine years
The US stock market took another hit on Friday as the S&P 500 was "on the cusp of despair" after it fell by almost 2 per cent.
The market was on the edge of correction territory after disappointing forecasts from leading technology groups triggered a wider sell-off as investors continued their retreat from risky assets.
The S&P index was down 1.7 per cent on Friday to take its total decline for October down to 8.8 per cent and put it on course for its worst month since the financial crisis in 2009.
It had dropped by more than 10 per cent since it reached its peak on September 21 – the typical definition of a correction – but pared losses to end above that level.
Head of trading at APAC, Stephen Innes, said: "A tumultuous week for markets around the world culminating in a bumpy Friday session, putting the S&P 500 on the cusp of despair as real interest rates at these constraining thresholds is crowding out risk asset."
The news comes despite data that showed the US economy was growing at a rate of 3.5 per cent in the third quarter.
Amazon's shares slumped by 7.6 per cent after they gave a discouraging outlook ahead of the Christmas shopping season, the biggest drop in the company's value for four years.
Elsewhere, Alphabet and Nasdaq Composite both closed at 2.1 per cent down, with the latter losing almost 11 per cent in October as the sell-off continued.
It comes as a result of investors leaving the tech trade despite Amazon and Apple's value soaring to over $1tn earlier this year.
"It's all been driven off quarter reporting," said Ernesto Ramos, portfolio manager for BMO Global Asset Management in Chicago. "When the reports are bad in technology you get a really bad day because of the elevated valuations."
The Dow Jones Industrial Average fell 296.24 points, or 1.19 per cent, to 24,688.31, while the S&P 500 lost 46.88 points and dropped to 2,658.69, with both returning to negative territory for the year.