New York CNN Business  — 

Stocks plunged Friday.

The Dow fell about 980 points, or 2.8%, following comments about likely aggressive interest rate hikes from Federal Reserve chairman Jerome Powell. A poor earnings outlook from Dow component Verizon didn’t help matters.

All 30 stocks in the Dow ended the day lower, led by Verizon (VZ), which fell more than 5.5%, and Caterpillar (CAT), which plunged 6.5%. Dow component American Express (AXP) was off nearly 3% in response to its latest earnings. Stocks finished near their lows of the day. The Dow was down as much as 1,019 points heading into the close.

The S&P 500 and Nasdaq each dropped more than 2.5%, too. All three indexes were in the red for the week, with the Nasdaq sliding almost 4% in the past five days. The Dow has now fallen for four straight weeks while the S&P 500 and Nasdaq have declined for the past three weeks.

Powell confirmed what many bond investors already suspected…that a half-point interest rate hike is “on the table” for the Fed’s next meeting in May. The yield on the 10-year Treasury bond has spiked to 2.9% in recent days…the highest level since December 2018.

Stock traders seem to be worried that even more aggressive rate hikes are in the cards beyond May.

Federal funds futures on the CME are indicating that the market is now pricing in a more than 90% chance of a three-quarter percentage point hike at the June meeting. That would bring rates, which were at zero just two months ago, to 1.5%. Rates haven’t been raised that sharply since November 1994.

The Fed is hoping that the rate hikes will put an end to runaway inflation. Economists and investors are concerned that surging interest rates will slow the housing market and consumer spending, and usher in a recession.

Some experts think that worries about the Fed going too far are overblown.

“Markets are very uneasy about the growing likelihood of a policy error by the Federal Reserve,” said Jamie Cox, managing partner for Harris Financial Group, in an email. “It’s madness really. Most investors would be well served to ignore the machinations of the pricing craziness and wait to see what actually happens with rates.”

The CNN Business Fear & Greed Index, which measures seven indicators of market sentiment, fell into Fear mode Friday.

“Fed worries and disappointing earnings are a lethal combination given how tenuous market sentiment is at the moment,” said Leo Grohowski, chief investment officer at BNY Mellon Wealth Management.