NEW YORK - Wall Street stocks fell sharply on Thursday after lacklustre retail sales data, amid fears that central bank interest rate hikes will prompt a global recession.

The Dow Jones Industrial Average finished down 2.3 per cent at 33,202.22.

The broad-based S&P 500 tumbled 2.5 per cent to 3,896.75, while the tech-rich Nasdaq Composite Index dropped 3.2 per cent to 10,810.53.

To investors now, “the risk of a hard landing is greater than they thought it was,” said LBBW’s Karl Haeling.

“I think the market discounted a soft landing like a mild recession, but it has not discounted a harder recession,” he said.

US retail sales fell 0.6 per cent in November from October to US$689.4 billion (S$938 billion), a bigger drop than expected, as persistently high inflation pressures shoppers during the key festive season.

Federal Reserve data released on Thursday also showed a 0.2 per cent decline in industrial production last month, defying analysts’ expectations for an uptick.

And the New York Federal Reserve Bank’s Empire survey saw a plunge in readings, with shipments and new orders worsening, analysts noted.

“Manufacturing conditions in the US are deteriorating as central banks continue to raise rates and the global economy weakens,” said economist Gurleen Chadha of Oxford Economics.

A day after the latest Fed interest rate hike, the European Central Bank and Bank of England were among central banks Thursday also lifting interest rates, both opting for 50 basis points increases.

While equity market losses were broad-based, large tech companies suffered through an especially brutal session, with Apple losing 4.7 per cent, Facebook parent Meta 4.5 per cent and Netflix 8.6 per cent. AFP