The S & P 500 fell on Thursday as the benchmark approached the bear market. Investors continued to litter stocks because of concerns that a rate hike in the Federal Reserve to combat rapid inflation could put the economy in recession.
After falling 4% on Wednesday, the broader market index fell 0.6%. The index is wobbling in the bear market territory, which is about 18% below the record reached in January.
The Dow Jones Industrial Average fell 234 points (0.7%) the day after experiencing the largest one-day decline since 2020 in the previous session, losing 1,164 points. The Nasdaq Composite index fell 0.2% after falling 4.7% on Wednesday.
Greg Bassuk, CEO of AXS Investments, said: “We believe that volatility will be the story of the balance in the second quarter, and frankly, the investor in the balance in 2022.”
Both the S & P 500 and the Dow have fallen by more than 2% in a week.These losses are in part Goal When Walmart This has been the result of higher fuel costs and a restrained consumer demand blow in the hottest inflation of decades. Target share fell 4% again on Thursday, even after falling 24% on Wednesday.
“The plunge in these companies (and other commodities / consumer companies this quarter) is ultimately impacted by inflationary pressures on earnings,” said Manish S. Despande, Head of U.S. Equity Strategy at Barclays. It shows that there is. ” Thursday’s note. “Despite rising inflation for most of the year [S&P 500] Margins and futures earnings remain resilient, but it doesn’t seem to be the case anymore. “
Cisco was the latest big company to plunge into results with a 14% drop in technology on Thursday.Cisco’s quarterly earnings after Wednesday’s bell Below analysts’ expectations And it warned that income would be disappointing this quarter.
Meanwhile, the rebound in some tech stocks pushed up the S & P 500 and the Nasdaq Composite at various points during Thursday’s trading. Synopsys shares rose 12% on Thursday after the software company made a profit. Cloud company Datadog’s share surged 12%.
Nvidia, Amazon and Tesla also traded green on Thursday.
Stocks are under pressure all year round, and investors initially move away from low-margin, high-value, high-tech stocks. However, growing concerns about the recession surprised investors, which subsequently led to sales spreading to more sectors of the economy, including banks and retailers.
The number of notable stocks in the S & P 500 hit a 52-week low on Thursday. Target stocks are trading at lows not seen since November 2020. Wal-Mart shares are trading at the lowest point since July 2020. Bank of America and Charles Schwab shares have fallen to their worst levels since February 2021. October 2017.
Jonathan Klinsky, Chief Market Engineer at BTIG, said: On Wednesday, “They came for the name of the consumer, but they still sold beaten growth. In other words, money is turning into cash rather than between different sectors.”
“It’s not a straight line, but [this] It’s a confirmation that selling a rally in the bear market is much easier than buying a dip. “
Several Wall Street strategists have released some disastrous forecasts for equities in case the Fed’s rate hike turns into a recession. GDP declined at a rate of 1.4% in the first quarter, so some slowdown has already been seen.
Deutsche Bank Reduce official S & P 500 goals overnightHowever, he said the recession would bring even greater losses.
“In the event of an imminent recession, we find that market sales are well above average, that is, in the upper half of the past range, and the initial overestimation has risen from -35% to -40% or the S & P 5003000. Deutsche Bank’s Chief Global Strategist, Binky Chadha, wrote in a memo.
Federal Reserve Chairman Jerome Powell at the Wall Street Journal meeting earlier this week Repeated his comment “You won’t hesitate” to reduce inflation.
Meanwhile, US weekly unemployed billing rose to 218,000 in the week ending May 14. Said The latest hint that economic growth is slowing on Thursday.
The S & P 500 fell again on Thursday, approaching the territory of the bear market
Source link The S & P 500 fell again on Thursday, approaching the territory of the bear market