The U.S. stock market declined sharply on Thursday after the Bank of England (BOE) slashed its growth outlook for 2019, citing underlying risks tied to Brexit. The United Kingdom is struggling to carve out a clear exit strategy from the European Union after Members of Parliament voted to reject Theresa May’s latest Brexit deal.

DOW JONES TAKES THE PLUNGE

All of Wall Street’s major indexes headed for sharp losses Thursday morning, and were on track for their second consecutive down session. The Dow Jones Industrial Average opened sharply lower, reflecting a steep loss in the futures market. It was last down 320.94 points, or 1.26%, to 25,069.36.

The broad S&P 500 Index fell 1.4% to 2,694.58, with eight sectors reporting losses of 1% or more. Shares of energy and materials companies were down the most during morning trading after Trump’s top economic adviser suggested that the United States and China were not close to signing a new trade deal.

The technology-heavy Nasdaq Composite Index is down 1.6% to 7,259.71.

A measure of implied volatility known as the CBOE VIX climbed double digits on Thursday. VIX reached a session high of 17.67 on a scale of 1-100 where 20 represents the historic average. The so-called “fear index” had recently traded at four-month lows.

FOG OF BREXIT

Global growth woes were at the center of the selloff on Thursday after the Bank of England slashed its forecast for the economy this year and next. BOE Governor Mark Carney said the downward revision was due to the ‘fog of Brexit’ hanging over the U.K. Last month, Prime Minister Theresa May failed to convince Members of Parliament to back her Brexit deal, which set the stage for a fiery debate in the House of Commons.

On Jan. 29, British lawmakers voted in favor of a non-binding agreement that opposed a no-deal Brexit. MPs also voted for an amendment that would allow “alternative arrangements to avoid a hard border” with Ireland. Prime Minister May is now pursuing the change the MPs have backed.

However, talks with the EU have not gone smoothly, with the latest reports showing a stalemate between May and Jean-Claude Juncker, the European Commission’s President. Despite holding “robust and constructive” talks on Thursday, May and Juncker were unable to break the impasse. They have vowed to meet again at the end of February.

Featured Image from Drew Angerer/Getty Images/AFP. Price Chart from TradingView