NEW YORK (AP) — Another broad selloff in the stock market on Monday deepened Wall Street’s losses from last week, sending the S&P 500 index reeling from its biggest drop since mid-June.
The benchmark index fell 2.1%, nearly doubling its losses from last week when it snapped a four-week winning streak. The Dow Jones Industrial Average fell 1.9% and the Nasdaq fell 2.5%.
Technology companies and retailers suffered some of the biggest losses. Shares of smaller companies also lost ground, dragging the Russell 2000 index down 2.1%.
The latest market decline comes as investors grapple with uncertainty about when inflation, the highest in decades, will ease significantly, how much the Federal Reserve will have to raise interest rates to bring it under control and how much rate hikes will slow the economy.
Wall Street will be looking for information on those unknowns later this week when the Federal Reserve holds its annual meeting in Jackson Hole, Wyoming.
“Volatility rose as investors grew nervous about what they might hear from officials at the Fed’s upcoming Jackson Hole symposium,” said Jeffrey Roach, chief economist at LPL Financial.
The S&P 500 fell 90.49 points to 4,137.99. The Dow lost 643.13 points to close at 33,063.61, while the Nasdaq fell 323.64 points to 12,381.57. The Russell 2000 fell 41.60 points to 1,915.74.
About 95% of stocks in the S&P 500 fell. Shares of technology companies, retailers, banks and communication services accounted for a significant share of the decline in the index. Microsoft fell 2.9% and Target fell 3%. JPMorgan fell 1.7% and Netflix fell 6.1%.
Cinema operators also fell in volatile trading following the news Cinema world is considering filing for Chapter 11 bankruptcy protection. The industry is still trying to recover from the virus pandemic. AMC Entertainment was down 5.5% and Cinemark was down 5.8%.
Market highlights included Signify Health, which jumped 32.1% after The Wall Street Journal reported that Amazon would be betting on the company.
Bond yields rose. The yield on the 10-year Treasury note, which tracks mortgage and other lending rates, rose to 3.03% from 2.97% late Friday.
The broader market’s losses followed a week of gains. Investors are trying to figure out where the economy will go as stubborn inflation hurts businesses and consumers. Record-high inflation is also keeping investors focused on central banks and their efforts to deal with high prices without further damaging economic growth.
“You’ve had a lot of growth, and there’s reason to be uncertain about where we’re going next,” said Tom Martin, senior portfolio manager at Globalt Investments. “There’s still decent potential for a recession.”
Minutes from last week’s July Federal Reserve Board meeting approved plans for more rate hikes despite signs of slowing economic activity. Traders worry that aggressive steps to slow the economy could go too far and lead to a recession. The U.S. economy has already contracted in the first half of 2022, and Wall Street will get more information on Thursday when the government releases an updated report on the U.S. economy for the second quarter.
Investors are also looking forward to this week’s Federal Reserve conference for signals on possible new rate hikes in the US to stem rising inflation. Fed Chairman Jerome Powell will deliver a speech Friday morning at the central bank’s annual meeting in Jackson Hole, which begins Thursday.
The Federal Reserve is holding its meeting after a tough week of business and economic data that showed inflation was still weighing on the economy but consumer spending remained resilient. Falling prices for gasoline and food products, for wheat and corn, helped to relieve this pressure. This helped to essentially halt the rise in inflation in July, although prices still remain high.
“I don’t think inflation has hit its stride yet,” Martin said. “We still don’t know how inflation will play out and what the Fed will do.”
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