Global stocks slide to three-month low on tech stocks plunge, rising US interest rates
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Stocks on major world markets slid to a three-month low on Wednesday, with the benchmark S&P500 stock index falling by more than 3.0 percent, its biggest one-day fall since February.

Technology shares tumbled on fears of slowing demand, while bond yields ended lower after seeing multi-year highs earlier this week.

Major equity indexes in Europe fell by more than 1.0 percent, also pulled down by technology shares, and gold prices inched up as some investors sought refuge in the metal.

"The S&P500 is looking very weak and negative and that is putting fear into investors,” said Michael Matousek, head trader at US Global Investors. “With the markets going down, people are increasing their allocation towards gold.”

On Wall Street, the Philadelphia Semiconductor index tumbled 4.46 percent after Swiss vacuum valve maker VAT Group said demand was softening from chip equipment makers.

Among the tech sector's worst performers in Europe, Austrian chipmaker AMS fell by 5.9 percent and STMicroelectronics closed down 5.8 percent.

Benchmark US 10-year Treasury notes rose late in the day, pushing yields down to 3.1931 percent. Yields on 3-year notes have recently traded just above 3.0 percent, providing long-absent competition for investment returns with equities.

The rise in US Treasury yields has been bolstered by good US economic data that has reinforced expectations of multiple rate hikes over the next 12 months by the Federal Reserve.

Stocks and bonds traditionally have been in a tug of war for capital, but for the past 10 years bonds have had one arm tied behind their back, said Jack Ablin, chief investment officer and founding partner at Cresset Wealth Advisors in Chicago.

"Short-term bonds are getting to be a compelling place to hang out,” he said. “This orphan status that equity markets have enjoyed for the last 10 years is disappearing and finally getting some competition from the bond market.”

The Dow Jones Industrial Average fell 831.83 points, or 2.2 percent, to 25,598.74. The S&P500 lost 94.66 points, or 3.29 percent, to 2,785.68 and the Nasdaq Composite dropped 315.97 points, or 4.08 percent, to 7,422.05.

Trump: Fed has 'gone crazy'

US President Donald Trump said Wednesday's stock market selloff was in fact a long awaited “correction,” and that the Federal Reserve, which has been raising US interest rates, has gone “crazy.”

Trump's use of the word “correction” to describe the selloff could be significant. A stock market correction is defined as a fall of at least 10 percent from the high point of the last 52 weeks.

"Actually, it's a correction that we've been waiting for a long time, but I really disagree with what the Fed is doing," Trump told reporters before a political rally in Pennsylvania.

"I think the Fed has gone crazy," Trump said.

IMF chief defends rate hikes

IMF chief Christine Lagarde on Thursday defended central bank rate hikes, calling them a "necessary development", after markets plunged in response to Trump blasting the Fed for going "crazy" with plans to raise borrowing costs again. 

"It is clearly a necessary development for those economies that are showing much improved growth, inflation rising, unemployment extremely low," Lagarde told a press briefing at the Fund's annual meetings in Bali.