The broad sell-off of U.S. stocks accelerated on Monday, leaving investors with several places to hide from the tumult of the market.
The S&P 500 fell 1.9%, adding losses after closing the longest series of weekly declines since 2011. The Nasdaq Composite fell 2.1%, while the Dow Jones Industrial Average fell 494 points, or 1.5%, to 32,405.
This year, the markets have aroused a barrage of investors. Inflation is at its fastest pace in decades. This has prompted the Federal Reserve to start what economists expect will be its most aggressive monetary policy campaign since the 1980s. Investors doubt whether the Fed will be able to do so the planned rate of increase in interest rates and cuts its balance sheet without throwing the economy into recession.
This financial tightening has added to the fear of slowing global growth. Of China implementation of locks and other measures to curb the spread of Covid-19 and Russia’s war against Ukraine reinforced concerns about supply chain disruptions and declining consumer spending.
“The US stock market is quite expensive, especially technology stocks. The market does not know how high the Fed needs to rise to control inflation, and we are experiencing a global slowdown, ”said Sebastien Gally, macro-strategist at Nordea Asset Management. “There’s a lot going on in the market.”
Sales hit all 11 sectors of the S&P 500 on Monday, dragging everything from stocks to manufacturers to stocks of banks and even energy producers, which is a relatively bright spot this year.
Technology stocks have been some of the biggest declines in the market.
parent Meta Platforms fell 2.7%, while
lost 2.5% and
decreased by 2.5%. Technology stocks have been particularly hard hit by this year’s sales as rising rates have forced some investors to be reluctant to invest in those parts of the market that look expensive.
Industrial stocks also suffered. Many investors are concerned that rising inflation, tightening monetary policy and prolonged disruptions in supply chains around the world will put pressure on economically sensitive sectors.
decreased by 1.8%, while
The volatility index – a so-called fear indicator on Wall Street, also known as the VIX – rose to 32.96.
“Market volatility shows that there is a great deal of uncertainty as to where people think we are heading,” said Peter Anderson, founder of Boston-based investment firm Andersen Capital Management.
The prospect of further raising interest rates to fight inflation has worried some investors that such measures are slowing economic growth.
These fears have led some money managers keep the dollar, is seen as a safer investment in times of volatility, thanks to its status as a world reserve currency. The WSJ Dollar Indexwhich measures the U.S. currency against a basket of 16 others, rose 0.2% on Monday.
Abroad, the pan-continental Stoxx Europe 600 fell 2% as a result of declines in the travel, leisure and technology sectors.
In Asia, Japan’s Nikkei 225 fell 2.5% on Monday, while Australia’s S & P / ASX 200 fell 1.2%.
China’s CSI 300 index, which tracks the largest companies in Shanghai or Shenzhen, fell 0.8%. Hong Kong markets were closed for the holidays.
In commodities, US oil fell 2.7% to $ 106.85 a barrel. Increased oil prices since the start of Russia’s war against Ukraine have begun to decline as traders worry that blockades to curb the spread of Covid-19 in China will lead to a drop in global demand.
This affected energy stocks on Monday. The S&P 500 energy sector lost 3.4%.
Meanwhile, the pressure to sell US government bonds eased.
The yield on a benchmark 10-year Treasury bond on Monday it was 3.122% compared to 3.124% on Friday. 10-year yields rose 1.6 percentage points from late 2021 to Friday, forcing some investors to overestimate the appreciation of technology and rising stocks. Bond yields rise when prices fall.
– Akane Otani contributed to this article
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