TSX sinks 3% amid hangover from U.S. Fed rate hike

North American markets faced a harsh reckoning Thursday following the U.S. Federal Reserve's outsize rate hike a day earlier, with Canada's main stock index dropping more than 600 points at closing time.

Major indexes have tumbled in 2022 amid concerns over rising inflation, climbing interest rates and economic slowdowns.

Despite a rebound Wednesday after the Federal Reserve signalled its 0.75 percentage-point interest rate hike would not become the norm, stocks fell across the board Thursday as hopes of a soft landing waned.

The S&P/TSX composite index closed down 607.50 points or 3.1 per cent to 19,004.06 — nearly 24 per cent below its spot at the start of the year.