Stocks plunged on Friday, with the Dow Jones Industrial Average suffering its worst one-day loss since the throes of the pandemic, as the latest raft of corporate earnings and the prospect of rising rates spurred a wave of selling.
The Dow fell 981.36 points, or 2.8%, to 33,811.40. The S&P 500 was 2.8% lower at 4,271.78, for its worst day since March. The Nasdaq Composite declined by 2.6% to 12,839.29. Friday's loss was the biggest for the Dow since Oct. 28, 2020.
UnitedHealth fell more than 3%, shaving more than 100 points off the Dow. Caterpillar also took out nearly 100 points from the 30-stock average, dropping 6.6% on the day. Goldman Sachs, Home Depot and Visa were also big downside contributors.
Those losses put the Dow down 1.9% for the week, its fourth straight weekly decline and its ninth losing week of the last 11. The S&P 500 posted a 2.8% weekly loss, marking its third straight one-week decline. The Nasdaq was the laggard this week, losing 3.8%.
Companies reporting disappointing quarterly results led the market decline Friday. HCA Healthcare dropped 21.8% and was the worst-performing stock in the S&P 500. The decline came as the company posted weak full-year earnings and revenue guidance.
"Investors appear to be moving away from the TINA 'there is no alternative' narrative as of late when it comes to equities," said Brian Price, head of investment management for Commonwealth Financial Network. "This is the second straight week of significant outflows from equity mutual funds and days like today are unlikely to change the sentiment moving forward."
That led other names in the health-care sector lower. Intuitive Surgical and Universal Health Services each lost 14.3%. DaVita fell almost 9.2% and DexCom fell 6.7%.
Verizon shares fell 5.6% after the company reported a loss of 36,000 monthly phone subscribers in the first quarter.
Shares of Gap plunged 18% after the company announced the CEO of its Old Navy division, Nancy Green, is leaving the business this week. Gap also slashed its outlook for net sales growth in fiscal 2022.
"This is all about Powell's comments, but the cautionary remarks about future sales growth in so many earnings announcements is driving home the essential point: fighting inflation will inflict some pain," said Jeanette Garretty, chief economist at Robertson Stephens Wealth Management.
Friday's action followed a dramatic reversal Thursday after a speech by Federal Reserve Chairman Jerome Powell dented market sentiment. Powell said during an International Monetary Fund panel that taming inflation is "absolutely essential" and a 50 basis point hike is on the table for May.
"Central bank hawkishness and bond yields back up are again moving markets," Ross Mayfield, investment strategy analyst at Baird, told CNBC. "Nothing especially new but a fresh reminder of the monumental shift underway on the policy front. Powell did note there may be benefit to front-loading hikes and being aggressive early, this sets them up for the potential to cut later on if the economy stumbles."
Rates on Thursday jumped on Powell's remarks. On Friday, the benchmark 10-year Treasury yield dipped slightly to around 2.9%.
When asked about the potential of a 75 basis point hike, Loretta Mester, president of the Federal Reserve Bank of Cleveland, told CNBC's "Closing Bell" Friday "we don't need to go there," and said she would support a 50 basis point hike in May.
"Despite April posting the strongest average price increase since World War II, and second-highest frequency of advance, the prospects of more aggressive rate tightening by the Federal Reserve in response to an inflation rate not seen since the early 1980s continues to weigh on stock prices and investor nerves," Sam Stovall, chief investment strategist at CFRA Research, told CNBC.