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Wall Street’s Nasdaq Composite fell 5% on Thursday in its biggest drop since the market tumult of 2020, marking a sharp reversal from a powerful rally in the previous trading session.

The drop put the index, where many of the top U.S. tech companies are listed, on track for its biggest one-day drop since September 2020.

The blue-chip S&P 500 index also suffered heavy selling, slipping almost 4%. All major sectors were in the red, with economically sensitive industries including consumer discretionary, technology and financial companies among the biggest losers.

US government bonds also came under intense selling pressure, pushing the 10-year Treasury yield up 0.18 percentage points to 3.1%.

The sharp reversal after a strong performance in US stocks and Treasuries in the previous session comes as major central banks withdraw crisis stimulus at a time of growing concerns over global economic growth.

The Federal Reserve, the world‘s most influential central bank, raised its main interest rate by 0.5 percentage points on Wednesday, its biggest increase since 2000, as it tries to tame intense inflation. Fed chief Jay Powell has sent a strong signal that the bank should raise rates by the same amount at its next two meetings.

However, in a sign of the headwinds facing global economies, the Bank of England warned on Thursday that the UK will slide into recession this year, with rising energy prices pushing inflation above 10 %.

Learn more about today’s market movements here.

Reporting by Adam Samson, Naomi Rovnick, George Steer and Ian Johnston in London, Eric Platt in New York and Hudson Lockett in Hong Kong

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