NEW YORK (CNN Business) - The Dow dropped about 260 points at the opening bell, or 0.8%. Investors continue to worry that the Federal Reserve is going to keep raising interest rates sharply.
Stocks tanked Friday, with the Dow plunging more than 1,000 points, after Fed chair Jerome Powell gave an eagerly awaited speech in Jackson Hole, Wyoming, in which he talked about the “pain” of rate hikes but indicated the Fed was serious about getting inflation under control.
Investors are now pricing in a nearly 65% chance of a third consecutive three-quarters of a point rate hike when the Fed meets on September 21. Just a month ago, odds of a rate increase of that magnitude were only 28%, as investors started to predict that the Fed would slow down the pace of rate hikes to a half-point.
The S&P 500 fell more than 3% Friday while the Nasdaq, home to many of America’s biggest tech stocks, fell 4%. Both indexes were down about 1% Monday. Stocks are now down for the month of August and are heading into what is typically the worst month for the market.
Investors are clearly growing nervous again and are starting to shun riskier assets. Along those lines, bitcoin prices fell below $20,000, hitting their lowest levels since mid-July.
Meme stocks GameStop and AMC were lower too, having both fallen on Friday. But another meme stock, Bed Bath & Beyond, defied the broader market slump. It rose 6% Friday and appeared set to build on those gains Monday.
In another sign of investor angst, the yield on the 10-year Treasury bond continued to rise, spiking to about 3.1%. Oil prices were higher as well, contributing to inflation fears.
The change in sentiment on Wall Street has been sharp and sudden.
Only two weeks ago, the CNN Business Fear & Greed Index, which looks at the CBOE Volatility Index and six other measures of investor sentiment, was showing signs of Greed. The index is now in Fear mode. The VIX has soared more than 30% in the past week.