The Dow Jones Industrial Average tumbled 666 points Friday in the biggest plunge since June 2016, as the worsening bond rout stirred angst that the Federal Reserve will accelerate its rate-hike schedule.

Solid jobs data that underscored the strength of the economy sent bond bulls scurrying and rattled equity investors who haven’t seen a week this bad in two years. The tandem selling accelerated after Dallas Fed President Robert Kaplan suggested officials may need to hike more than three times this year to cool the advance. The 10-year Treasury yield popped above 2.85 percent for the first time since January 2014.

“Yields have risen, inflation evidence is rising rather broadly. It’s that combo of factors that’s starting to mount,” said Jim Paulsen, chief investment strategist at Leuthold Weeden. “And then you get a report, and that’s the straw that breaks the camel’s back, and that’s kind of what we got into today.”

The S&P 500 Index fell 2.1 percent to 2,762.13. The Dow dropped 2.5 percent to close at $25,520.96, the lowest since Jan. 10. The Nasdaq Composite Index lost 2 percent to 7,240.95.

Fiat Chrysler Automobiles dropped 7.2 percent, due largely to a report that the U.S. Justice Department has offered to settle its emissions-cheating lawsuit against the carmaker if it recalls 104,000 vehicles and pays a substantial but unspecified civil penalty. General Motors Co. fell 3.4 percent to $41. Ford Motor Co. was off 1.9 percent to $10.71.

There was nowhere to hide on the stock market, with all 11 S&P 500 sectors lower. The index’s five-day rout reached 3.9 percent — marking its first pullback of at least that much in a record 404 days. Energy shares sank 4.1 percent as earnings disappointed and crude slumped. The tech sell-off worsened, sending the Nasdaq 100 Index lower by 2.1 percent. Its weekly rout hit 3.7 percent, most since February 2006. Not even a record rally at Inc. could rescue the measure, as the world’s biggest company, Apple Inc. hit its lowest since October.

“People are finally starting to reprice reflation, it’s about time,” Jeanne Asseraf-Bitton, head of global cross-asset research at Lyxor Asset Management, said by phone. “Global economic growth is strong and corporate earnings are very solid, so there’s no reason to question the equity bull market. The rise in bond yields is good, it’s just the speed at which it’s happening that is making investors nervous. Bottom line: this is a healthy correction.”

U.S. hiring picked up in January and wages rose at the fastest annual pace since the recession ended, as the economy’s steady move toward full employment extended into 2018. Equities are being tested by the surge in bond yields, with some fund managers saying 3 percent U.S. 10-year rates would signal a bond bear market. The level is seen by many stock-watchers as a potential trigger for a correction in equities.

In Europe, a bond selloff deepened across the continent, and equities dropped for a fifth straight day, the longest streak since November. Disappointing results from companies including Deutsche Bank AG and BT Group Plc. paced losses, with Germany’s DAX giving up the year’s gains, capping the worst weekly decline since 2016. Bond yields reached a fresh two-year high, while the euro and British pound weakened. Japanese debt gained and the yen declined after the Bank of Japan intervened to stem the rise in rates.

This week’s market pullback has come even as U.S. economic data continues to reflect strong growth.

U.S. employers added a robust 200,000 jobs in January, slightly above market expectations for a 185,000 increase. Meanwhile wages rose at the fastest pace in more than eight years, suggesting employers are competing more fiercely for workers. The figures point to an economy on strong footing even in its ninth year of expansion, fueled by global economic growth and healthy consumer spending at home.

The pickup in hourly wages, along with a recent uptick in inflation, may make it more likely the Fed will raise short-term interest rates more quickly in the coming months. Some economists were predicting Friday that the central bank will raise its benchmark rate four times this year, rather than the three times most previously expected.

“With financial conditions continuing to ease and core price inflation also starting to pick up, we expect this will persuade the Fed to hike rates four times this year,” Andrew Hunter, an economist with Capital Economics, wrote in a published note Friday.

This week’s sell-off comes as more money has been going into stock funds. In the three weeks through Jan. 24, investors have pushed a net $18.3 billion into U.S. stock funds this year, according to estimates from the Investment Company Institute.

Traders continued to sift through a raft of corporate earnings reports Friday.

Roughly halfway through this earnings reporting season, some 78 percent of companies have turned in profits above analysts’ expectations. Revenues have also been stronger than expected, an indication that the improving global economy is translating into better sales. Altogether, 64 percent of reporting S&P 500 companies have exceeded expectations for both revenue and earnings, according S&P Global Market Intelligence. That’s up from 54 percent a quarter earlier.

While earnings overall have been strong, some big companies have posted disappointing results.

Google’s parent company Alphabet slumped 4.9 percent after the search giant reported results that missed analysts’ forecasts. The stock slid $58.33 to $1,123.26.

Exxon Mobil dropped 5.8 percent, while Chevron lost 4.2 percent after the oil companies’ latest quarterly results fell short of forecasts. Shares in Exxon shed $5.19 to $83.88. Chevron gave up $5.22 to $120.35.

Apple declined 3.4 percent after the technology company said it sold 77.3 million iPhones in the last quarter, below the 80 million analysts expected. The stock was down $5.63 to $162.15.

Amazon climbed 4.5 percent after its fourth-quarter profit increased by more than $1 billion. The online retail giant said it sold more voice-activated gadgets, enlisted new Prime members and benefited from its recent purchase of Whole Foods. Amazon shares gained $62 to $1,452.


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