U.S. stocks spiraled Friday to cap a volatile week lower as fears that aggressive central bank tightening would trigger a recession wreaked havoc on financial markets.

The benchmark S&P 500 plunged 1.7%, testing a fresh 2022 low. The Dow Jones Industrial Average shed 486 points, or 1.6%, briefly falling into bear market territory at one point during the session and closing at a 2022 low. And the technology-heavy Nasdaq Composite was off by 1.8%. The CBOE Volatility Index (^VIX) — Wall Street's "fear gauge" — teetered above 30.

Meanwhile, the 2-year U.S. Treasury note spiked past a 15-year high of 4.2% and the 10-year U.S. Treasury held near 3.7%, the highest level since 2010. In commodity markets, crude oil fell sharply, with West Texas Intermediate (WTI) futures settling nearly 6% lower at $78.74 per barrel.

The moves come after Federal Reserve officials raised interest rates by 75 basis points for a third straight time earlier this week and Chair Jerome Powell implied in hawkish remarks that policymakers were prepared to accept economic pain in exchange for restoring price stability. Central banks around the world have followed suit in recent days.

Goldman Sachs has slashed its year-end 2022 target for the S&P 500 index by about 16% to 3,600 from 4,300.

“The expected path of interest rates is now higher than we previously assumed, which tilts the distribution of equity market outcomes below our prior forecast,” Goldman’s David Kostin said in a note.

"Based on our client discussions, a majority of equity investors have adopted the view that a hard landing scenario is inevitable and their focus is on the timing, magnitude and duration of a potential recession and investment strategies for that outlook,” he wrote.

In corporate news, Costco (COST) was among Friday movers after the bulk retailer reported fiscal fourth-quarter earnings and revenue that beat Wall Street estimates but said inflationary pressures were weighing on profit margins as consumer habits shift. Shares were down 4.3% on Friday.

Shares of FedEx (FDX) dropped 3.3% after the shipping giant announced cost-cutting measures and rate increases, one week after a grim pre-earnings announcement sent its stock plummeting 20%.

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Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc

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