By Chuck Mikolajczak

NEW YORK (Reuters – The U.S. stock market closed at a sharp drop on Thursday, as fears of recession grew after central banks across the globe took steps to stop rising inflation.

In seven sessions, the benchmark experienced its sixth consecutive decline. The Fed’s aggressive rate hike of 75 basis points was expected to end the longest losing streak in the index’s history. Stocks rallied Wednesday.

The rate rises of Britain and Switzerland Thursday have reignited concerns about central banks trying to control inflation. This could result in a slowdown or even complete recession.

“That is what people reassessing today – what is the probability of a potential recession and will corporate profits come in where analysts estimates are or will those get taken down,” said Tom Hainlin, global investment strategist at U.S. Bank Wealth Management’s Ascent Private Wealth Group in Minneapolis.

“The Swiss surprised everyone today by coming out to surprise us all and saying that they are more concerned about the strength and stability of their currency than inflation.”

The fell 741.46 points, or 2.42%, to 29,927.07, the S&P 500 lost 123.22 points, or 3.25%, to 3,666.77 and the dropped 453.06 points, or 4.08%, to 10,646.10.

Each of the 11 major S&P sectors were lower, although the defensive consumer staples was outperforming the broader market as names like WalMart, General Mills (NYSE:) and Procter & Gamble (NYSE:) were among the few advancers as only 14 S&P 500 components finished higher for the session.

Growth stocks were hit hard with the S&P growth index down 3.75% while the Nasdaq Composite saw its fifth decline of 4% or more since the start of May.

All hopes of a Fed-led soft economic landing seem to be fading. Wells Fargo Analysts at the NYSE see more than half of the chance for a recession. The rising risks of a recession have been warned by other banks, Deutsche Bank (ETR: Morgan Stanley (NYSE:).

The benchmark index fell 23% over the past year and confirmed that a bear market had begun on Jan. 3. Dow Industrials, however, was close to confirming its bear market.

CBOE volatility index also known as Wall Street’s fear gauge rose slightly from the previous week’s one-month peak of 35.05. As an indicator that selling pressure could be at its peak, many analysts expect it to hover around 40.

There was 13.98 Billion shares traded on U.S. Exchanges, as compared to 12.16 Billion for the whole session in the previous 20 trading days.

On the NYSE, decliners outnumbered advances by a 7.58 to 1 ratio.

The S&P 500 posted one new 52-week high and 99 new lows; the Nasdaq Composite recorded seven new highs and 779 new lows.