Stocks sank Wednesday as concerns about rising interest rates and the economic impact of the omicron variant pushed the Nasdaq composite into correction territory.
The tech-heavy Nasdaq fell almost 1.2 percent Wednesday to sink 10 percent below a record set in November. Investors consider a stock or index to be in a correction after it falls 10 percent from its most recent 52-week high. Both the Dow Jones Industrial Average and S&P 500 index fell 1 percent.
Stocks have fallen throughout January as Wall Street braces for a series of interest rate hikes from the Federal Reserve. The Fed is expected to begin raising interest rates from the near-zero baseline set in March 2020 after several months of rising inflation.
Rising interest rates tend to sap momentum from stock prices as companies face narrower profit margins and potentially pull back on hiring or investments. Technology stocks are particularly sensitive to higher interest rates since tech companies tend to borrow more than firms in other industries.
Stocks in major airlines, construction firms, travel and hospitality sector companies also fell Wednesday with the U.S. still muddling through staffing shortages, supply issues, school closures and a reduction in consumer activity driven by omicron.
Boeing fell 3.5 percent, Caterpillar fell 3.1 percent and Apple fell 2 percent, leading the Dow's losses. Moderna took the steepest tumble of any Nasdaq-listed stock, falling 6.7 percent on the day.