Wharton professor Jeremy Siegel says a major Fed rate increase could send the Dow down 1,000 points, and ending the hikes could boost the S&P 500 by over 10%

• A 50-basis-point hike this week could send the Dow down 1,000 points, Wharton's Jeremy Siegel said.
• If the Fed ends its rate hikes and productivity improves, the S&P 500 could jump 10%, Siegel said.
• The veteran professor flagged signs of US economic weakness and sounded the recession alarm.

Stocks could tumble if the Federal Reserve surprises investors with a 50-basis-point hike to interest rates on Wednesday, instead of raising them by the expected 25 points, Jeremy Siegel has warned.

"There will be tremendous selling pressure for the risk markets, and we could easily see a 1,000-point drop in the Dow immediately," the Wharton finance professor said in his WisdomTree commentary this week.