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Investors are braced for more losses on Wall Street today after a vicious sell-off wiped out the gains of a relief rally and dragged down many leading technology stocks.

Shares in Asia and Europe have today followed US equities lower at the end of a week that saw the US Federal Reserve raise its main interest rate by half a percentage point for the first time since 2000 and indicate it would tighten its monetary policy further at meetings in June and July.

Comments from Fed chair Jay Powell after the announcement on Wednesday initially provided some solace for investors who feared a steeper rise in the interest rate to suppress surging US inflation.

But yesterday gravity appeared to take hold of the US stock markets’ elevated valuations and the Nasdaq Composite dropped 5 per cent, its biggest one-day decline since June 2020.

The blue-chip S&P 500 index also declined significantly, sliding 3.5 per cent with more than 95 per cent of the stocks in the benchmark ending lower.

The severity of the sell-off stunned investors. Tom di Galoma, managing director at Seaport Global Holdings, described the fall as a “capitulation trade”. Danny Kirsch, head of options at Piper Sandler, said there was “nowhere to hide” for investors after the biggest sell-off since the start of the pandemic.

Shares of some of corporate America’s biggest names lurched lower, with Amazon down 7.6 per cent, Tesla sinking 8.3 per cent and Apple sliding 5.6 per cent.

The sell-off spilled over into the fixed income market, with yields on 10-year US government bonds rising back above 3 per cent as buyers sought inflation protection in commodities.

• Analysis: My colleague Robert Armstrong has more on what he calls “a stomach-churning few days”.

Thanks to all our readers who voted in yesterday’s poll. Two-thirds of you believe higher inflation expectations are now built into the economy and that the Fed will struggle to avert a recession. Here’s the rest of the day’s news — Gordon

Five more stories in the news

1. Exclusive: US Congress urged to regulate stablecoins Pat Toomey, the top Republican on the Senate banking committee, has sounded the alarm over the fast-growing stablecoin industry, warning that “bad things will happen” unless the $180bn market in popular cryptocurrencies is regulated soon.

2. Xi Jinping warns against ‘any slackening’ of zero-Covid policy China’s president has reaffirmed his commitment to the country’s controversial strategy for controlling the spread of Covid-19, triggering a sell-off in Chinese stock markets. The CSI 300 index of Shanghai- and Shenzhen-listed stocks shed 2 per cent today, while the benchmark Hang Seng index in Hong Kong dropped 3.8 per cent.

3. Momentum grows for an ECB rate rise Dovish policymakers at the European Central Bank have indicated they are ready to accept an end to almost eight years of negative borrowing costs and raise interest rates, as early as July. The Bank of England yesterday raised its key policy rate and warned the UK will slide into recession by the end of the year.

4. Boeing ditches its Chicago headquarters The aerospace group yesterday said it is to shift its base to Arlington, Virginia, bringing the company closer to federal lawmakers and rival defence contractors. Lockheed Martin, Northrop Grumman and General Dynamics are already in the Washington suburbs.

5. US homebuyers stretch finances to beat rising rates Americans are stretching their budgets to buy new homes and rushing to strike deals to avoid higher mortgage financing costs, according to the latest industry data. Mortgage rates have reached their highest levels in more than a decade, according to the latest Freddie Mac survey published yesterday.

The day ahead

Economic data The pace of job creation in the US economy is expected to have slowed slightly last month even as the unemployment rate dips to pre-pandemic levels. According to economists’ forecasts assembled by Reuters ahead of data due to be released later today, US non-farm payrolls grew 391,000 in April, compared to increases of 431,000 in March and 750,000 in February.

Monetary policy Federal Reserve board governor Christopher Waller and St Louis Fed president James Bullard will discuss monetary policy on a panel hosted by the Hoover Institution.

Corporate earnings Insurance company Cigna is expected to report first quarter revenue of $43.4bn, according to analysts polled by Refinitiv. Sports gear maker Under Armour and sports betting company DraftKings also report results today.

IPO Shares in Bausch & Lomb, the eyecare unit of the company formerly known as Valeant Pharmaceuticals, begin trading today in New York after yesterday pricing its initial public offering below its target range.

Tomorrow you can hear Henry Kissinger, Chimamanda Ngozi Adichie and more at our inaugural US FTWeekend Festival in Washington. As a newsletter subscriber claim an exclusive limited-time offer of 50% off your pass using promo code: FTNewslettersxFTWF22.

What else we’re reading

When history is weaponised for war Bad history can kill, Simon Schama writes in our Weekend Essay. In July 2021, Vladimir Putin, in his own wannabe professor mode, published a lengthy screed, “On the Historical Unity of Russians and Ukrainians”, which manages to be stupefyingly dull while also exhaustively untrue.

• Go deeper: For more than a decade, Ukraine’s government and financial system and other key infrastructure were pummelled by Russian state-backed hackers. Now, hordes of pro-Ukrainian hackers are matching Russian cyber aggression.

Musk taps wealthy friends and true believers to back his Twitter deal Oracle co-founder Larry Ellison, crypto exchange Binance and asset management groups Fidelity, Brookfield and Sequoia Capital are among 19 investors who have stumped up more than $7bn of funding for Elon Musk’s $44bn buyout of Twitter, it was announced yesterday.

Fake meat start-ups go to court Executives in the food industry are closely watching a patent dispute between Impossible Foods, one of the earliest plant-based meat producers, and Motif FoodWorks. The dispute centres on a protein molecule designed to make plant products taste like beef burgers.

Nasa tackles asteroid strikes The existential threat from asteroids and comets, portrayed in films such as Armageddon and Don’t Look Up, has been known since scientists showed in the 1980s that an impact 65mn years ago wiped out the dinosaurs. Now, Nasa is preparing to smash a spacecraft into a faraway asteroid at 23,000kph to divert its path.

Networking for a hybrid era As employees return to offices at least part-time, formal work events have resumed, spurring a heady mix of dread and excitement about professional networking. Emma Jacobs explores how to deepen contacts in a hybrid era.

• Plus: Sign up to Working It, a newsletter which explores workplace trends and the big ideas that are shaping work today. There is also a weekly podcast of the same name.

Readers respond

The unprecedented leak this week of the draft majority opinion to overturn Roe vs Wade led many readers to get in touch with FirstFT and share their views. Here are some extracts from what you have been saying:

That decision replaced the will of the people (voters) with that of the Supreme Court and cut off therapeutic debate. By design, the states are the incubators of the public will. Roe unsuccessfully attempted to terminate that process by terminating lawful debate. Reversal will allow the debate to work its way throughout the nation, state by state — H. R. Piet, Lewes, Delaware, US.

[The Roe vs Wade ruling] has been highly destructive of the Supreme Court nomination process, essentially dumbing it down to scare tactics from both sides — Simon Noble, Madrid, Spain.

[Roe vs Wade] should absolutely not be overturned. As a German woman in the US this idea totally scares me and makes me feel back in the 1960s — Elisabeth Bluethner, Sammamish, Washington.

Thank you for all your emails. If you have any comments about this email please send them to FirstFT@ft.com and thanks for reading — Gordon.