WASHINGTON, June 6: Fears of yet another raise in US interest rates caused US stocks to fall for second consecutive day on Tuesday and led to a ripple effect across the world. The Dow Jones Industrial Average dropped below 11,000 for the first time since March. The Standard & Poor’s 500 Index fell 9.32, or 0.7pc, to 1,255.97 in early trading in New York. The Nasdaq Composite Index dropped 24.30, or 1.1pc, to 2145.32. The US Federal Reserve has increased rates 16 consecutive times, to 5pc and is due to announce its next decision on June 29.

Stocks in most Asian markets fell sharply, with Tokyo’s Nikkei 225 index down 1.81pc, while India’s benchmark index fell 2.5pc and Australian stocks fell 1.6pc. The major European indexes were all lower in afternoon trading, with Ireland’s benchmark index down 3.41pc. UK stocks fell for a second day. Prices also tumbled in Ireland.

The FTSE 100 Index lost 92.3, or 1.6pc, to 5669.8 as all but six of its members fell. The FTSE All-Share Index lost 52.62, or 1.8pc, to 2,883.14. Stocks and currencies in Brazil and Mexico — Latin America’s top two economies — extended their sell-off on Tuesday for a second day.

In Australia, fears of rising US interest rates combined with a softening in metal prices to cause a fall. In Canada, stocks fell for a second day amid concern that high US interest rates may slow economic growth and crimp demand for commodities.