The Dow plunges over 550 points, likely due to worry regarding rising interest rates and a conversation on a conference call from bellwether Caterpillar that claimed this year may end with slow growth.
The Dow Jones industrial average was 584 points lower as of 2:39 p.m. ET. The S&P 500 dropped 1.9%. The Nasdaq composite fell 2.2% as shares of Facebook, Amazon, Alphabet, and Netflix all dropped more than 4 percent.
The construction equipment maker, Caterpillar reported revenue and earnings that were better than expected which initially sent the stock higher, but later in the day, the companies shares fell 6.8%.
Caterpillar CFO Bradley Halverson said during a conference call that the company’s outlook assumed that the first quarter would be “the high watermark for the year.”
The construction equipment maker is a barometer for the state of the economy and the overall market. Caterpillar’s stock has a 0.81 correlation with the Dow over the last six months, according to Kensho. A correlation of 1 would mean the two move in lockstep with each other.
2018 has been a rocky year for the market. On Friday, February 2, 2018, the Dow dropped 666 points, a 2.6 % drop.
On Monday, February 5, 2018, the Dow Jones industrial average suffered its most significant one-day point drop in history, plunging 1,175 points.