Wall Street tumbles on growing concerns over economic growth

• Indexes set to erase nearly all of previous session gains
• Airlines, cruises fall on cancellations due to Hurricane Ian
• Indexes down: Dow 1.58%, S&P 1.97%, Nasdaq 2.58%

US stock indexes slipped on Thursday as worries of a global economic downturn from aggressive central bank rate hikes and risks of potential contagion from a turmoil in UK markets turned investors risk averse.

Out of the 11 S&P sector indexes, six of them dropped more than 2%. The Nasdaq fell over 1% due to losses in megacap growth names such as Amazon.com Inc , Apple Inc , Microsoft Corp , Meta Platforms Inc and Tesla Inc. They were down between 2.41% and 4.12%.

The calm brought about by the Bank of England's decision on Wednesday to buy long-dated government securities to stabilize the turmoil in the markets caused by the government's new economic plan was short-lived.

Sterling fell and bond prices slid, with the selloff in British assets spilling over to even safe-haven US Treasuries and top-rated German bonds.

In the previous session, the S&P 500 recorded its first gain in seven sessions. The benchmark index has lost about $9.1 trillion in market value this year and was last valued at $31.2 trillion, according to Datastream.

Wall Street's main indexes recorded hefty declines in the first hour of trading, poised to wipe out almost all of the previous session's gains.

"You need to see the market beginning to stabilize and that's not going to happen until it gets a sense of whether or not the Fed is done raising interest rates or earning season comes in better than expected," said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut.

The yields on many Treasuries, which are considered virtually risk-free if held to maturity, now dwarf the S&P 500's dividend yield, which recently stood at about 1.8%, according to Refinitiv Datastream. 

Meanwhile, comments from the Federal Reserve's Cleveland President Loretta Mester echoed other central bank officials through the week, who have vowed more interest rate hikes to tame inflation. 

Data showed the US labor market remained resilient as the number of Americans filing new claims for unemployment benefits unexpectedly fell last week, while gross domestic product fell at an unrevised 0.6% annualized rate in the last quarter.

At 9:59 a.m. ET, the Dow Jones Industrial Average was down 469.62 points, or 1.58%, at 29,214.12, the S&P 500 was down 73.40 points, or 1.97%, at 3,645.64, and the Nasdaq Composite was down 284.83 points, or 2.58%, at 10,766.81.

Airline carriers and cruise operators fell on cancelling or delaying trips after Hurricane Ian hit Florida's Gulf Coast with catastrophic force. 

American Airlines fell about 3.84%, while United Airlines Holdings, Southwest Airlines and Delta Air Lines fell between 3.54% and 4.37%.

Cruise companies Norwegian Cruise Line Holdings Ltd and Carnival Corp fell 4.10% and 4.52%.

Declining issues outnumbered advancers for a 12.35-to-1 ratio on the NYSE and a 4.69-to-1 ratio on the Nasdaq.

The S&P index recorded no new 52-week highs and 58 new lows, while the Nasdaq recorded three new highs and 242 new lows.