The Dow closed its worst day in three months, down more than 700 points as recession fears grow.

Stocks fell sharply on Thursday after new data showed retail sales fell more-than-expected in November, stoking fears that the Federal Reserve’s relentless interest rate hikes are tipping the economy into recession.

The Dow Jones Industrial Average fell 764.13 points, or 2.25%, to 33,202.22 — its worst day since September as hopes for a year-end rally waned. The S&P 500 fell 2.49% to 3,895.75, bringing its decline for December to around 4.5%. The Nasdaq Composite fell 3.23% to 10,810.53 as the technology-heavy index extended its losses for 2022 to nearly 31%.

The sell-off was widespread with only 14 stocks in the S&P 500 trading in positive territory. Big tech stocks fellwith shares apple And the the alphabet down more than 4%, while Amazon And the Microsoft It was less than 3%. shares Netflix decreased by 8.6% after a Digiday Report which said the broadcast company is offering to refund advertisers after missing viewership targets.

Disappointing retail sales report The proposed inflation has a negative impact on consumers. Retail sales fell 0.6% in November, according to the Commerce Department. That was a bigger loss than the Dow Jones estimate of a 0.3% decline.

Selling began on Wednesday in the wake of the latest Fed release Overnight borrowing rate increased. The central bank also said it would continue to raise interest rates through 2023 and expected the federal funds rate to peak at 5.1% higher than expected. With Wednesday’s rise of half a percentage point, the target range for rates is currently between 4.25% and 4.5%, the highest in 15 years.

“The stock market’s reaction now is to take a recession into account, and to dismiss the possibility of the ‘soft/soft’ downturn that Powell mentioned recently in [Brookings Institution]Quincy Crosby, chief global strategist at LPL Financial, wrote Thursday.

“The tug-of-war between the Fed and the markets is squarely on the side of the market: the slowdown is not ‘temporary’, and the Fed will have to act before 2024,” Crosby added.

The Dow closed below 34,000 on Wednesday and then selling intensified on Thursday after weak retail sales data. Treasury yields continued to defy the Fed and were pulled back by concerns that the central bank is going too far. The 10-year yield is down to less than 3.5%.

Banking stocks also fell as fears of a recession grew. c. B. Morgan Chase It lost about 2.5%.