It was the first time since June 2016 that the Dow had fallen more than 500 points. Investors are anxious it could prompt the Federal Reserve to raise interest rates faster than expected.
Figures from the U.S. job market on Friday showed wages rising at the fastest annual rate since 2009, as the American economy created 200,000 new jobs last month - a better performance than had been expected by economists. Its weekly rout hit 3.7 per cent, most since February 2006.
The U.S. dollar and bond yields jumped on Friday while stock markets fell as U.S. data showed the strongest annual wage growth since 2009, raising the specter of accelerating inflation and more U.S. interest rate hikes than expected this year.
The down day came after the government reported that USA job growth surged in January and wages increased further, recording their largest annual gain in more than 8-1/2 years, bolstering expectations that inflation will push higher this year as the labor market hits full employment.
"The major driver of the selloff is the awakening to the new interest rate environment", says Erik Davidson, chief investment officer at Wells Fargo Private Bank. "The concern for the stock market is as interest rates go up so does the cost of debt service, the discount rate that you would use in factoring earnings growth for companies".
Syria's alleged use of chemical weapons again under worldwide scrutiny
He says the U.S.is "even more concerned" about the possible use of the nerve agent sarin. That strike followed a deadly chemical weapons attack by Assad's government.
The numbers were a good sign for workers.
The Nasdaq has fallen more than 100 points despite Amazon reporting record earnings. As well as energy shares dropping more than three per cent.
Others have said USA stocks were rising mostly on the economic growth that's been seen worldwide in the last two years, which also had sent foreign stocks higher.
Adding to the pressure were disappointing earnings reports from major companies.
People are finally starting to reprice reflation, its about time, Jeanne Asseraf-Bitton, head of global cross-asset research at Lyxor Asset Management, said by phone. The 10-year Treasury yield increased to 2.852% on Friday. The point decline for the Dow marked its worst since December of 2008, when it tumbled 680 points. Bottom line: "this is a healthy correction".
Syria war: Turkey suffers deadliest day in Afrin offensive
The army said that one of the soldiers was killed in a clash and another on the border area, without giving further details. The statement said that since the beginning of the operation 13 Turkish soldiers had been martyred and 57 wounded.
US stocks fell sharply Friday, with the Dow Jones Industrial Average dropping by more than 650 points.
Trump's Twitter feed was silent Friday on the market downturn.
The S&P 500 posted 18 new 52-week highs and 18 new lows; the Nasdaq Composite recorded 48 new highs and 103 new lows.
The unemployment rate was unchanged at a 17-year low of 4.1 percent.
North Korean skaters begin training for PyeongChang Games
But it is the sheer volume of condoms that has caught the local media's attention in South Korea, where the games will be held. Some experts say North Korea may want to use improved ties with the South as a way to weaken US-led worldwide sanctions.
Given the strength of the global economy, central banks, led by the U.S. Federal Reserve, have started to remove some of the supports that helped supercharge stock and bond prices over the last decade.