Stocks fell sharply in volatile trading on Thursday as investors dumped riskier assets in favor of traditional safe havens like bonds.
The Dow Jones Industrial Average traded 650 points lower, bringing its two-day losses to more than 1,400 points. The S&P 500 dropped 2.1 percent and was on pace for a six-day losing streak. The broad index also broke below its 200-day moving average for the first time since May. The Nasdaq Composite pulled back 1.5 percent and entered correction territory.
Treasury yields pulled back from multiyear highs, with the benchmark 10-year yield sliding to 3.13 percent. The two-year yield also fell to 2.84 percent.
The major indexes fell after some of the major tech names failed to recover from steep losses in the previous session. Netflix fell more than 1.5 percent after briefly trading higher. Apple also declined 0.8 percent, erasing earlier gains.
"It's a momentum correction, not a portfolio correction," said Joe Terranova, chief market strategist at Virtus Investment Partners. "While we have a bias to believe 2008 could happen again, I don't think this is the case."
"Less is more in this environment," Terranova added. "I think you need to be an observer of the guidance you get in earnings."
Gold futures surged nearly 3 percent to $1,226.70 per ounce. The Cboe Volatility index (VIX), widely considered as the best gauge of fear in the market, rose to its highest level since Feb. 12 on Thursday.
"As markets slide further and investors seek other safe havens like options for protection, we could see higher VIX levels moving forward," said Jeff Chang, managing director at Cboe Vest.
Tech shares fell more than 4.5 percent on Wednesday, marking their worst day since 2011. The sell-off led to the Dow sinking more than 800 points and the S&P 500 dropping more than 3 percent. It was also the 28th time since 2011 the S&P 500 posted a more than 2 percent decline, according to data from Birinyi Associates.
Investors had been fretting over a sharp rise in yields fears that rising borrowing costs could slow down the economy. Those fears were quelled slightly by the release of weaker-than-expected inflation data. The U.S. government said the consumer price index rose 0.1 percent in September, well below the expected gain of 0.2 percent.
"Net, net, the economy may be running hot, but it isn't fast enough to kick up inflation pressures and calls into question the need for Fed policymakers to move interest rates to higher levels," Chris Rupkey, chief financial economist at MUFG Union Bank, said in a note.
The recent downturn in equities comes as investors brace for the upcoming earnings season. J.P. Morgan Chase and Citigroup are among the companies scheduled to report Friday before the bell.
Expectations are high for this earnings season. Analysts polled by FactSet expect S&P 500 earnings to have grown by 19 percent in the third quarter.
"We look at this as a buying opportunity," said Dryden Pence, chief investment officer at Pence Wealth Management. "I would have my shopping cart out here."
"The question is whether the market bounces off a 5 percent or a 10 percent drop," he said. "I think we're going to bounce around here for a while."