Wall Street stocks tumbled again Friday following a plunge in Netflix shares that sent the Nasdaq further into correction territory, spurring questions of just how far the market will fall.

After a bruising session on European bourses, all three major US indices fell, led by the Nasdaq which lost 2.7 percent on Friday alone.

The tech-focused index is down about 15 percent since its November record, midway between the 10 percent loss considered a correction and nearing the 20 percent drop that qualifies as a "bear market."

"We're still pretty far from a bear market, but if we start to see signs that higher interest rates are slowing the economy, you could easily pass from a correction to a bear market," said Gregori Volokhine of Meeschaert Financial Services.

Friday's session was dominated by the spectacular fall in Netflix, which ended with a loss of more than 20 percent after it projected it would add only 2.5 million subscribers in the first quarter of 2022, a sharp slowdown compared with earlier gains in the pandemic.

Netflix results "particularly spooked" technology-focused stocks on Friday, said Ross Mayfield, analyst at Baird.

"There's a sense now that the consumer is kind of renormalizing their behavior and shifting spending to services," he said.

That feeling "set off a chain reaction of what the next year to five years of consumer spending might look like versus what we would have thought beforehand."

Stocks have been under pressure so far this year after the Federal Reserve shifted to a more restrictive monetary policy path that will include interest rate increases, with the first expected in March.

The Fed is scheduled to meet next week amid intensifying concerns about accelerating inflation that has spurred debate on how many times the central bank will raise the benchmark lending rate in 2022.

"The mood in the markets has been progressively getting worse recently as traders are preparing themselves for the prospect of the Federal Reserve hiking interest rates three or four times this year," said David Madden at Equiti Capital.

CFRA Research still expects solid US growth in 2022, but recently trimmed its forecast slightly to 4.2 percent based on an outlook that includes four rate hikes, said chief investment strategist Sam Stovall.

The S&P 500, the most broad-based of the major indices, has fallen 8.3 percent from its last record.

Based on how stocks have historically responded to monetary policy shifts, Stovall estimates the S&P 500 could fall about 15 percent.

But a drop of twice that amount is also possible, depending on whether equities end up more or less generously valued compared with history, he said.

"The question is how scared investors are likely to be?" Stovall said. "But I don't know the answer."

A big drop in Netflix sent the Nasdaq into a deeper correction and closer to a 'bear' market territory
A big drop in Netflix sent the Nasdaq into a deeper correction and closer to a 'bear' market territory GETTY via AFP / Michael M. Santiago

New York - Dow: DOWN 1.3 percent at 34,265.37 (close)

New York - S&P 500: DOWN 1.9 percent at 4,397.94 (close)

New York - Nasdaq: DOWN 2.7 percent at 13,768.92 (close)

London - FTSE 100: DOWN 1.2 percent at 7,494.13 (close)

Frankfurt - DAX: DOWN 1.9 percent at 15,603.88 (close)

Paris - CAC 40: DOWN 1.8 percent at 7,068.59 (close)

EURO STOXX 50: DOWN 1.6 percent at 4,229.56 (close)

Tokyo - Nikkei 225: DOWN 0.9 percent at 27,522.26 (close)

Hong Kong - Hang Seng Index: UP 0.1 percent at 24,965.55 (close)

Shanghai - Composite: DOWN 0.9 percent at 3,522.57 (close)

Euro/dollar: UP at $1.1344 from $1.1312 late Thursday

Pound/dollar: DOWN at $1.3553 from $1.3600

Euro/pound: UP at 83.67 pence from 83.17 pence

Dollar/yen: DOWN at 113.70 yen from 114.11 yen

Brent North Sea crude: DOWN 0.6 percent at $87.89 per barrel

West Texas Intermediate: DOWN 0.5 percent at $85.14 per barrel