US stock and bond yields fell, as the S&P 500 index flirted with a alcohol marketin an ongoing sell-off driven by investor fears that the economy might slip into recession.
Major indexes fell early in the Thursday session, a day later drop 4%, before the restoration of the land. They eventually ended lower, with all three on course for weekly losses of at least 2.9%. Concerns about consumer spending, which helped lift the market from pandemic lows, weighed on stocks and bond yields.
The S&P 500 lost 22.89 points, or 0.6%, to 3,900.79, approaching bear market territory — the market’s shortening of a 20% decline from a recent high. The Dow Jones Industrial Average fell 236.94 points, or 0.8 percent, to 31,253.13 points. Both indices closed at their lowest level since March 2021.
The Nasdaq Composite Index, which Entered a bear market area Earlier this year, it slipped 29.66 points, or 0.3%, to 11,388.50.
Investors have bought government bonds, which are seen as a safe haven asset in times of economic uncertainty. return on 10-year treasury bonds It slipped to 2.854% from 2.884% on Wednesday, retreating from its strength for seven of the past nine trading days. Bond yields and prices move in opposite directions.
Earnings reports from some of America’s largest retailers in recent days have added to concern that the highest rate of inflation in four decades is catching up to American consumers. Economy into recession. Investors were already struggling with the end of an era of loose monetary policy that underpinned big gains for stocks and other riskier assets. The combination of factors has recently led to heavy losses in stocks and some corporate bonds, and many investors expect the volatility to continue.
Philip Saunders, portfolio manager at
Asset Manager based in UK and South Africa.
Shares rose $1.91, or 4.4 percent, to $45.04, after executives said suitors were still interested in buying the company. Sales doubled in Aprilmaking them the latest retailers to point to inflationary pressures on demand.
He said this week High costs ate profits In the last quarter, which led to the sale of their shares on a larger scale in the market.
Cisco Systems It fell $6.64, or 14%, to $41.72 after the communications equipment company missed analyst expectations for its quarterly results.
He said gasoline sales boosted revenue and earnings in the first quarter, sending shares up more than $3.97, or 7.4%, to $57.39.
In economic news, the Ministry of Labor said new applications for unemployment benefits rose for the third week in a row. Initial jobless claims, a proxy for layoffs, remain historically low. Separately, US home prices Peaked in AprilAccording to recent data, the number of sales has decreased.
Anthony Saglimpin, global markets analyst at Ameriprise Financial, said economic data pointed to healthy consumer spending, allaying fears of a recession.
“For consumers to really cut back on spending, they have to be afraid that they are going to lose their jobs and this is not the environment in which we live,” said Mr. Saglimpin.
However, some analysts say the slowdown in consumer spending could mean the Fed won’t have to raise interest rates aggressively to slash consumer demand.
“Some amount of deceleration in discretionary spending will naturally or naturally help ease supply chain constraints,” said Seth Wonder, chief investment officer at Acorns. “At the end of the day, this is one of the biggest inputs to the inflation issues we face.”
The war in ukraine It adds to the inflationary pressures that is driving the Fed to embark on a series of interest rate increases and reduce its bond holdings. The Covid-19 lockdown in China has led to a sharp slowdown in the world’s second-largest economy. Some investors say that higher interest rates in the future will normalize investor expectations.
“We’re going through a recalibration process and that’s a good thing,” said Todd Lowenstein, chief equity strategist for The Private Bank at Union Bank. “In the short term it will be painful, but sometimes you need short-term pain to fix the behavior.”
The last time the S&P 500 fell into a bear market was during the pandemic panic in March 2020. It was short-lived, and the market quickly embarked on a two-year rally and peaked on January 3. More likely, older industrial companies and bank stocks fared less badly and are still far from bear market territory.
“By throwing tight monetary policy into the mix, we have a recipe for volatility and investor nervousness,” said Clara Cheung, global market analyst at JPMorgan Asset Management.
Brent crude, the global benchmark, rose $2.93 a barrel, or 2.7%, to $112.04 a barrel. In the cryptocurrency markets, bitcoin added 3.5% from the 5 pm ET level on Wednesday to trade at $30,213.64, an increase over the past three days out of five.
International stocks fell. The Stoxx Europe 600 Index fell 1.4%, led by shares of financial services and food and beverage companies. Hong Kong’s Hang Seng Index plunged 2.5%.
Elsewhere in Asia, the CSI 300 of the largest stocks listed in Shanghai and Shenzhen rose 0.2%. Japan’s Nikkei 225 fell 1.9% and South Korea’s Kospi Composite fell 1.3%.
– Dave Sebastian contributed to this article.
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Corrections and amplifications
The Nasdaq Composite Index fell into bear market territory in March. An earlier version of this article stated that it did so incorrectly in February. (corrected May 19)
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