Dow sinks 660 + points, drops well below 26,000

The day started with good economic news. The government announced there had been a 2.9% increase in average hourly earnings over the past year: http://www.bbc.com/news/business-42921615

"US payrolls expanded by 200,000 last month, driven by hiring in construction, food services and health care, the US Labor Department said.

The average hourly wage for private sector workers crept up 2.9% compared to January 2017.

The unemployment rate held steady at 4.1%. 

Economists have puzzled over lacklustre wage growth, which has lagged in prior months despite the decline in the unemployment rate."

According to the NYTimes article linked below, wage increases overall have been "Lagging as job growth continues", because of a collapse in union membership (among other reasons): 
https://www.nytimes.com/interactive/2018/02/01/business/economy/wages-salaries-job-market.html
"A collapse in the rate of union membership for private-sector employees — to 6.5 percent last year from the upper teens in the early 1980s — appears to have played a key role in holding down wages. This is partly because unions benefit workers directly: Average pay for workers represented by unions tends to be higher than for those who aren’t, even after controlling for education and other characteristics."

Nevertheless, even this modest increase in wages, concerned the markets. This CNN article explains why:
http://money.cnn.com/2018/02/02/investing/stock-market-today-dow/index.html

"The other concern: Wage growth could be a sign that inflation, which has been mysteriously low for years, may heat up. That would force the Federal Reserve to raise interest rates faster than investors may be comfortable with.

Those concerns are showing up in the bond market. The 10-year Treasury yield reached a four-year high of 2.84% on Friday. It was at about 2.4% at the start of the year.

Some investors are worried they could climb high enough to slow the economy by raising borrowing costs. They also worry that higher returns on bonds will make stocks look less attractive by comparison."

Another factor affecting the markets was the fear of rising interest rates:

https://www.cnbc.com/2018/02/02/us-futures-move-lower-as-investors-worry-about-rising-yields.html

'"The key for the market today is rising interest rates," said Mike Baele, managing director at U.S. Bank Wealth Management. "The old adage is: 'Bull markets don't die of old age, they are killed by higher interest rates.' That looms large."'

As well as Energy companies' earnings:

http://abcnews.go.com/Business/wireStory/markets-now-us-stock-indexes-open-lower-52793480

"Energy companies fell more than the rest of the market Friday after Exxon Mobil and Chevron reported disappointing results."

All these concerns culminated in the Dow Jones falling 665.75 to 25,520.96.
https://www.npr.org/sections/thetwo-way/2018/02/02/582809604/dow-plummets-more-550-points

"The Dow closed at 25,520.96. With a loss about 1,000 points since Monday, it was the blue chip index's worst weekly performance in 2 years. Other major indexes fell about 2 percent Friday. The broader S&P 500 fell 60 points, to 2,762.13; the Nasdaq index lost 145 points, closing at 7,240.95."

 

The Dow Jones had dropped earlier this week but it bounced back, will it happen again? Or is this the beginning of a "bear market"?