Stocks On Track For Worst Week Since March 2020 Amid ‘Deafening’ Recession Worries

Stocks rallied somewhat following several sharp selloffs this earlier week: The Dow Jones Industrial Average rose 0.2%, nearly 100 points, while the S&P 500 gained 0.6% and the tech-heavy Nasdaq Composite 1.3%.

Markets have been roiled by rising recession fears this week, however, with the S&P 500 falling roughly 6%—on pace for its worst weekly performance since March 2020, when pandemic lockdowns last sent the U.S. economy into a recession.

After especially steep losses on Thursday, the Dow fell below the 30,000 mark and hit its lowest level so far in 2022, while the S&P and Nasdaq remain stuck in bear market territory.

Investors are still digesting the latest rate hike from the Federal Reserve, which raised interest rates by 75 basis points on Wednesday—the biggest increase in 28 years, with Fed Chair Powell hinting at a similarly large rate hike for the central bank’s next policy meeting in July.

Markets are increasingly concerned that the Fed won’t be able to achieve a soft landing and will instead plunge the economy into a recession as it aggressively raises interest rates to combat 41-year high inflation.

“Our worst fears around the Fed have been confirmed: They fell way behind the curve and are now playing a dangerous game of catch up,” according to analysts at Bank of America, who predict a 40% chance of a recession next year.