S&P 500 Touches Bears, Dow Has Worst Weekly Loss Cycle in 100 Years – Stock Exchange

With fears of increased rigidity from central banks – to fight inflation – and of slowing economic growth and a possible recession, risk appetite was low on Wall Street.

Volatility is increasing again, leading US investors to choose safer assets, such as bonds, over stocks. However, in the last minutes of trading, the Dow and S&P 500 indices bounced again.

The Dow Jones Industrial Average closed with very marginal gains, adding 0.03% to 3,1261.90 points, after trading in the red for most of the session. Despite this momentum, it established its eighth straight week of decline – the longest cycle of weekly losses since 1923, in 99 years.

The Standard & Poor’s 500 Index, which fell more than 2%, ended practically at the waterline, up 0.01% to 3,901.36 points. And at the lowest level during the session, the index was in a “bear market”, losing more than 20% since the close of its last record, and in early January it reached 4,796.45 points. It recorded an all-time high of 4818.62 points and was set on January 4th session.

However, the S&P 500 eventually managed to regain some steam in the last stretch of the session, so the bear market was short-lived. However, the index held for the sixth consecutive week in red (the largest weekly series of declines since 2001 – the year of the terrorist attacks in the United States).

For its part, the Nasdaq Technology Index lost 0.30% to settle at 11354.62 points. Remember that the Nasdaq has been trading in a bearish territory for some time.

Fears of a significant increase in key interest rates by the Federal Reserve (which has already raised rates twice since it began its cycle of hikes in March) have put pressure on high-growth stocks (such as technology) and heightened fears that corporate profits will be penalized. these companies.

There is growing concern that the US Federal Reserve will not be able to stem rising inflation – which has reached its highest levels in four decades – without pushing the US economy into recession.

In the past 50 years, only one bear market in US stocks has been accompanied by a recession – and that was the crash of 1987.

Morgan Stanley predicts a 27% chance of a US recession over the next 12 months – when in March that probability was just 5%.