Topline
Markets fell despite a rebound late in the session on Thursday, continuing one of the worst starts to a year in history as mounting losses dragged the benchmark S&P 500 index to a new low point for 2022 and investors continued to offload stocks amid ongoing uncertainty.
Increasingly negative investor sentiment continues to weigh on markets.
Key Facts
The stock market rebounded late in the session to pare back losses: The Dow Jones Industrial Average fell 0.3%, around 100 points, while the S&P 500 lost 0.1% and the tech-heavy Nasdaq Composite was flat.
The benchmark S&P 500 index hit a new low point for 2022 and now sits at the edge of bear market territory, having fallen nearly 20% from its record highs in January, while the Nasdaq is already in a bear market, down 30% from its peak last November.
Investors have been rocked by growing concerns about an economic slowdown caused by surging inflation, with the Federal Reserve scrambling to raise interest rates and tighten monetary policy in response.
Stocks have faced “relentless selling pressure”—falling for the last five weeks in a row—amid “uncomfortably high” pricing pressures and an increasingly “unclear” outlook for economic growth and American consumers, says Edward Moya, senior market analyst for Oanda.
Shares of tech stocks, which have largely led the market’s declines this year, continued to fall: Apple was down nearly 5%, Tesla nearly 3%, Disney over 2% and Facebook-parent Meta 1%.
Meme stocks GameStop and AMC Entertainment, meanwhile, surged by more than 30% and 20%, respectively, earlier on Thursday before paring back gains, with trading on GameStop shares halted several times for volatility.
Crucial Quote:
“Stocks are for sale in all corners of the globe, and the market tone is increasingly dour,” says Vital Knowledge founder Adam Crisafulli. “There is very little money being put to work by people planning to hold long positions for multiple weeks.”
Big Number:
Nearly 20%. That’s how much the S&P 500 has fallen so far this year, putting the benchmark index on the edge of bear market territory. The Dow is down nearly 15% in 2022, while the Nasdaq has dropped 29%.
What To Watch For:
“The degree of market loss this year is staggering,” says Mark Hackett, Nationwide’s chief of investment research, adding, “The dramatic shift in market leadership continues, with companies leading the way out of the initial stages of the pandemic experiencing catastrophic declines.” What’s more, negative investor sentiment is also “beginning to impact Wall Street analysts,” who are slashing price targets for S&P 500 companies at the fastest clip in more than two years, he notes.
Further Reading:
Dow Falls 300 Points As Red-Hot Inflation Report And Sinking Tech Stocks Drag Markets Lower (Forbes)
Dow Drops Over 600 Points, Stock Selloff Continues As Fed ‘Hangover’ Slams Markets (Forbes)
Meme Stocks Surge Despite Market Selloff: GameStop Trading Halted, AMC Jumps (Forbes)
Source: https://www.forbes.com/sites/sergeiklebnikov/2022/05/12/dow-falls-600-points-sp-500-hits-new-2022-low-as-staggering-market-losses-continue/