The Federal Reserve chairman clearly spooked the market this week. Simply hinting that the Fed might wind down its stimulus program later this year was enough to lead to another week of losses.
The three major U.S. stock market indexes ended the week down between 1.8% and 2.1%.
On Wednesday and Thursday, the Dow shed more than 550 points, and stocks stayed on rocky ground Friday.
Bernanke's words have kept bond yields jumping. The 10-year Treasury yield hit nearly 2.54% Friday.
Investors have been bailing out of bonds and sending yields higher over the past month amid speculation that the Fed will soon taper its monthly bond purchases, known as quantitative easing.
Even after this week's sell-off, stocks are still way up this year. The Dow, S&P 500 and Nasdaq have gained between 11% and 13% since the start of January.
The Fed has been a major driver of the bull market over the past few months as it has injected liquidity into the markets. Traders say the coming shift in monetary policy will mean even more volatility in the months ahead.
The CBOE Market Volatility Index ( was up almost 2% Friday, a day after surging 23%. CNNMoney's )Fear and Greed Index remained in Extreme Fear mode.
Japan's Nikkei index posted a 1.7% bounce, closing the week with a gain of 4.3%.
But Chinese stocks continued to head lower as investors worried about tighter liquidity conditions across the country and a slump in manufacturing activity.
Nomura analysts said Chinese government policies seem to be the reason for the cash crunch.
"Since mid-March, the government has introduced a series of tightening measures in the shadow banking sector to contain financial risks," they said in a research note. "The People's Bank of China could have reacted and injected liquidity through open market operations. Its decision not to intervene shows that it is committed to tightening the policy stance."
In corporate news, Oracle (Fortune 500) slid 9% after the tech firm reported weak results. ,
Shares of Facebook ( edged higher, one day after the social media giant )rolled out its Instagram video product.
Darden Restaurants (Fortune 500), which operates chains including Red Lobster and Olive Garden, reported earnings that missed estimates, but a slightly better-than-forecast revenue increase. ,
Shares of CarMax (Fortune 500) slumped after the auto retailer missed revenue forecasts, even as it reported better-than-expected quarterly profits. ,
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