The Dow and other indicators fall again 1:07
New York (CNN Business)--
U.S. stocks fell sharply on Monday, pushing the S&P 500 below 4,000 points for the first time in more than a year, as traders anticipate a new wave of bad news about inflation and corporate profits. The Dow Jones fell 654 points, almost 2%.
The S&P 500 fell 3.2% and the Nasdaq Composite lost about 4.3%.
At the time, 10-year Treasury bills hit 3.19%, their highest yield since late 2018.
The moves come after an incredibly volatile week on Wall Street and mark the fifth straight week of losses for the three major US stock indexes.
"The Ukraine war, a global energy shock and the risk of the Fed trying to fight supply-driven inflation have prompted a reappraisal of macro scenarios among market participants," Blackrock analysts wrote in a note on Monday. Monday in the morning.
"In addition, we see little chance of a perfect economic scenario of low inflation and growth."
Fed Chairman Jerome Powell told investors Wednesday afternoon that future rate hikes of more than half a percentage point "are not something [the Fed] is actively considering," leading to pressure. bullish in the markets.
All major indices were up around 3%, with the S&P 500 and Dow Jones having their best days in nearly two years.
By Thursday, investors decided they weren't that interested in the changes, worried about the growing chances that the Fed would plunge the economy into a recession.
The Dow fell 1,120 points, or 3.3%, the S&P 500 fell 3.7%.
The Nasdaq Composite fell 5.2%, marking its worst day since 2020.
Jerome Powell says that the Fed announces an increase in interest rates to control the worst inflation that hits the US.
"I've been in the markets for 25 years and I've never seen anything like this," said Danielle DiMartino Booth, CEO and chief strategist at Quill Intelligence, a Wall Street and Federal Reserve research firm.
"It's violent, not just volatile."
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The future-focused tech sector is particularly vulnerable to higher rates: Investors expect tech companies to post strong growth, but inflation and higher interest payments will take a big chunk out of those gains.
Amazon fell 5.2%, Facebook parent company Meta Platforms (FB) lost around 3.7% and Google owner Alphabet (GOOGL) fell 2.8%.
Apple (AAPL) and Netflix (NFLX) each fell more than 3%.
Meanwhile, data analytics firm Palantir sank more than 21% after reporting mixed quarterly earnings.
Electric vehicle maker Rivian has plunged nearly 21% as an internal lockdown period to sell shares expires.
Ford owns a $102 million equity stake in the company and lost money on the deal.
A key indicator for the market will be known this week
Investors are expecting a key inflation indicator, the consumer price index, later this week.
How long will inflation last?
The answer is in the past
“If you want to be a glass-half-full person, the lack of further bad news is something to hold on to and on Wednesday you should see US CPI core and headline inflation fall,” Société Générale strategist wrote, Kit Juckes, in a note.
A drop in inflation could "calm the markets enough" to reverse the sell-off by the weekend, he said.
Still, as earnings season draws to a close, forecasts for the coming quarter remain dim.
Mentions of "weak demand" in earnings reports are now at their highest level since the second quarter of 2020, according to research by Bank of America analysts.
"Our Guidance Index, Earnings Revision Index and Corporate Sentiment reading all tumbled to the lowest level since [2020 Q2]," they wrote, "adding to recession concerns."
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