S&P 500 closes at new low for 2022 and Dow falls 458 points as sell-off resumes on recession fears

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• Major US indexes plunged Thursday after staging a relief rally in the prior session. 
• UK prime minister Liz Truss stood by proposed tax cuts, despite a chorus of vocal critics.
• US Treasury yields hit multi-year highs this week as markets react to growing recession fears. 

US stocks sank Thursday following a relief rally in the prior session, as mounting recession fears and UK market turmoil renewed the sell-off.

Stocks recovered from their steepest losses of the day, with the Dow Jones Industrial Average down over 600 points and the Nasdaq lower by nearly 4% at one point in the afternoon. Major indexes still ended deep in the red, though, with the S&P 500 hitting a new closing low for the year. 

UK prime minister Liz Truss said that she stood by the government's plan to cut taxes, which earlier in the week rocked markets and sent the pound falling last week to 37-year lows. Top economists including Paul Krugman, Mohamed El-Erian, and Nouriel Roubini have ripped into the new fiscal policy, warning that it could set UK inflation surging even higher and require more aggressive moves by the central bank, upping the risk of recession. 

Apple led US stocks lower, as Bank of America downgraded the iPhone makers' stock on weakening consumer sentiment. It's the second steep loss of the week for the company, following Wednesday's sell-off after a report that weaker demand scuttled plans for expanded iPhone 14 production. 

Treasury yields jumped again, as investors mulled continued Federal Reserve hawkishness even in the face of growing recession odds. The 10-year Treasury yield gained six basis points to 3.76%. The key government bond yield topped 4% for the first time since 2008 on Wednesday. 

Here's where US indexes stood at the 4:00 p.m. closing bell on Thursday: 

•  S&P 500: 3,640.56, down 2.11%
• Dow Jones Industrial Average: 29,225.61, down 1.54% (458.13 points)
• Nasdaq Composite: 10,737.51, down 2.84% 

Here's what else is happening today:

• Former Treasury Secretary Larry Summers warned that the latest market rout has parallels to the opening moments of the Great Recession and that volatility in the UK risks spreading worldwide.
• China told state banks to prepare for a massive dollar dump and a yuan buying spree as Beijing's prior interventions have failed to stop the yuan from plunging this year.
• Retail investors are showing signs of throwing in the towel if shares of Apple and Tesla start to tumble, Vanda Research said in a note.

In commodities, bonds, and crypto:

• West Texas Intermediate crude fell about 0.7% to $81.59 a barrel. Brent crude, the international benchmark, fell 0.75% to $88.67 per barrel.
• Gold prices were mostly flat, trading at $1,669 per ounce.
• The 10-year Treasury yield was up about six basis-points to 3.76%.
• Bitcoin fell about 0.6% $19,409.

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