US stocks tumble amid recession fears

By Aysu Bicer

ANKARA (AA) - US stocks ended sharply lower Monday amid rising fears of a recession that would be led by the Federal Reserve’s rate decision to be announced this week.

James Gorman, the CEO of Morgan Stanley, one of the largest investment banks in the US, said there is an even chance of the US economy entering a recession.

Referring to concerns over a recession, Gorman said: "It is possible for us to enter a recession. Frankly, this probability is now 50-50."

US consumer expectations for inflation over the coming year rose to 6.6% in May, according to a survey by the Federal Reserve Bank of New York.

The figure ties with the highest reading of the series since the inception of the survey in June 2013.

Annual inflation in the US hit 8.6% in May, the highest since December 1981, which strengthened the view that the Fed could increase interest rates further.

Stocks entered a bear market as the S&P 500 fell 151.23 points, or 3.88%, to 3,749.63, while the Nasdaq Composite slipped 530.80 points, or 4.68%, to 10,809.23.

The Dow Jones Industrial Average fell 876.05 points, or 2.79%, to 30,516.754.

The MSCI World index declined 3.7%.

The yield on 10-year Treasuries advanced 22 basis points to 3.38%.

Global benchmark Brent crude was trading at $122.37 a barrel, up 0.10%, while West Texas Intermediate crude rose 0.2% to $120.92 a barrel.

Gold futures fell 2.7% to $1,824.60 an ounce, while silver dropped 4% to $21.09.