Stock prices fell again on Thursday, and the S & P 500 fell for the sixth straight week, approaching the territory of the market. This is because Wall Street has continued to recover from selling movements, unlike investors that have been seen for years.
The S & P 500 fell more than 1% early on Thursday after falling 1.7% on Wednesday. By Wednesday’s closing, the index has fallen 4.6% and is on track for at least the largest weekly decline since January. This will also be the 6th consecutive week of drops.
Technology stocks, which have been leading the recession all year round, have fallen again. The Nasdaq Composite Index fell 2%.
This year’s Wall Street sales, after the S & P 500 has risen 90% in the last three years, Rising inflation And interest rates, and how they can be combined Hurt the economyIt has lived its own life, as investors consider all new data points to be a source of concern.
The recent wave of sales has also hit cryptocurrencies such as: BitcoinAnd metal and others Raw materials such as copper and petroleumLoss reflecting weakening sentiment across financial markets and concerns about the global economy. All of them were lower on Thursday’s early trading.
This fall put the S & P 500 on the edge of the bear market. This, in Wall Street terminology, means a drop of more than 20% from the previous peak. This is a label that highlights how dark the investor’s mood has been. Until Wednesday, the index fell 18% from its peak on January 3rd. The Nasdaq Composite is in the bear market territory, down 29% from its November highs.
This week’s decline came with a new update on the pace of inflation in the United States. According to the government, the consumer price index has risen 8.3% year-on-year and prices paid to producers have risen 11%. Both indicators show that inflation has cooled slightly from the previous month, but remains unpleasantly high.
For equity investors, inflation data is directly reflected in their views on how the Federal Reserve raises interest rates aggressively. Higher borrowing costs slow growth and reduce interest in risky investments.
Analysts say stock investors are unlikely to change their gloomy mood when the FRB raises its benchmark rate this month by 0.5 percentage points and is expected to do so again at its June and July meetings. .. The rate increase will be slower. It will not be clear until it is certain that inflation has peaked.
“It’s clearer that inflation is chilling and rising interest rates are slowing demand before the Federal Reserve begins to think about the end of the current rate hike cycle,” said Bill Adams, chief economist at Comerica Bank. You will want to see the evidence. ” Thursday client.
