Stocks slide to lowest since March 2021, S&P closes below 4,000

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U.S. stocks slid on Monday to extend last week’s losses as investors awaited more inflation and earnings data this week to gauge the strength of the economy and corporate earnings as the Federal Reserve continues to tighten its monetary policy.

The S&P 500 fell more than 3% and ended at its lowest level since March 2021, closing below 4,000. The Nasdaq Composite plunged 4.3% as tech stocks came under renewed pressure. And the Dow fell more than 650 points, or 2%, to settle at 32,245.70.

A combination of concerns on the geopolitical, COVID-19 and inflationary fronts have weighed heavily on risk assets in recent weeks, triggering volatility in stocks, cryptocurrencies and commodities. The CBOE Volatility Index, or VIX, jumped above 34, well above its longer-term average of around 20.

“The path of least resistance remains lower for global equity markets to start the week. The focus remains on inflation, rising interest rates and the war in Ukraine,” wrote Brian Price, chief executive. of investment management at Commonwealth Financial Network. in an email on Monday. “The combined factors of tight supply chains resulting from China’s zero-COVID policy and rising oil and food prices due to the war in Ukraine, are causing inflationary fears that are triggering an outflow from risky assets. market is devoid of major positive catalysts at the moment, so it’s no surprise that we’re starting the week under pressure.”

This week, investors await more data on the state of inflation in the United States, which will help show how much more aggressive the Fed may need to be to contain elevated price pressures. Wednesday’s consumer price index (CPI) and Thursday’s producer price index (PPI) for April are expected to show a deceleration in price increases, suggesting March may have been the peak the rate of price increases in the economy as a whole.

This data will come on the heels of the Fed’s latest monetary policy decision and Federal Reserve Chairman Jerome Powell’s press conference, which was met with heightened volatility among risky assets. Stocks climbed then slid, and Treasury yields rose on the back of the monetary policy decision, as investors weighed whether the tools at the central bank’s disposal would be enough to keep inflation from escalating. root more while preserving economic growth.

“We knew the Fed was going to hike rates 50 basis points – it was the most telegraphed hike in human history. But the markets sold off. And then they finally did and it It’s like, okay, it’s done,” Eric Diton, chairman and chief executive of The Wealth Alliance, told Yahoo Finance Live on Friday. “And so you had a lot of short coverage and you had a big rally.”

“It wasn’t the real deal. The real deal was what followed…and that’s that there’s a huge amount of uncertainty there,” he added. “Yes, we know the Fed is going to go up. How many times are they going to go up? There’s a huge disparity between rates and the rate of inflation. Is the Fed going to have to go up to 6% or 7%?%, or will inflation go down, they’ll meet in the middle? That uncertainty is one of the biggest factors pushing this market to keep going down.”

Other concerns about economic growth have also abounded recently, as Russia’s war in Ukraine and new virus-related shutdowns in China fueled worries about further lingering supply chain disruptions. Many strategists agreed that the next moves in the market would be driven by the Fed’s response to inflation in this environment.

“Going forward, the trajectory of the market will depend on the Fed’s fight against inflation,” wrote David Kostin, chief U.S. equity strategist at Goldman Sachs, in a note. “In our base case, the negative impact on valuations of higher real rates will be partially offset by a narrowing yield differential. If recession risk increases, interest rates could fall, but not enough to prevent multiple sand stock prices from falling further.”

Meanwhile, the earnings season will continue this week with big names such as Disney (DIS), Peloton (PTON) and Rivian Automotive (RIVN). So far, 85% of S&P 500 constituents have reported actual results, according to FactSet. And on Friday, the S&P 500’s expected earnings growth rate was 9.1%, which, if sustained, would represent the index’s smallest increase since the fourth quarter of 2020 and fall below its rate. five-year average growth of 15.0% .

4:05 p.m. ET: Stocks slide to lowest close since March 2021 as selling pressure builds: S&P 500 drops 3.2% to close below 4,000

Here are the top moves in the markets as of 4:05 p.m. ET:

  • S&P 500 (^GSPC): -132.10 (-3.20%) to 3,991.24

  • Dow (^ DJI): -653.67 (-1.99%) to 32,245.70

  • Nasdaq (^IXIC): -521.41 (-4.29%) to 11,623.25

  • Raw (CL=F): -$7.40 (-6.74%) at $102.37 per barrel

  • Gold (CG=F): -$29.90 (-1.59%) at $1,852.90 per ounce

  • 10-year cash flow (^TNX): -4.4 bps for a yield of 3.0790%

1:53 p.m. ET: Crude oil falls, energy stocks lag to restore some recent gains

West Texas intermediate crude oil prices fell on Monday amid the market selloff and reported that the European Union was set to lower its sanctions on Russian energy imports.

U.S. crude oil futures fell more than 6% to trade just above $103 a barrel on Monday afternoon. Brent, the international standard, also fell about 6% to below $106 a barrel.

According to a Bloomberg report, the EU was set to drop a proposed rule that would ban EU-controlled vessels from transporting Russian oil to other countries. Such a move would at least mitigate a disruption in transportation-related energy markets, even amid Russia’s ongoing war in Ukraine.

The energy sector was also the worst performing sector in the S&P 500 on Monday afternoon amid falling oil prices. Still, the sector has largely outperformed the broader market year-to-date, up around 38% from the S&P 500’s 15.5% decline. And crude oil futures US have climbed another nearly 37% since the start of the year and 4.8% in the last month alone.

12:27 p.m. ET: Stocks trim some losses, but still significantly lower

Here are the top moves in the markets as of 12:27 p.m. ET:

  • S&P 500 (^GSPC): -86.78 (-2.10%) to 4,036.56

  • Dow (^ DJI): -410.88 (-1.25%) to 32,488.49

  • Nasdaq (^IXIC): -342.31 (-2.82%) to 11,802.35

  • Raw (CL=F): -$5.18 (-4.72%) at $104.59 per barrel

  • Gold (CG=F): -$18.60 (-0.99%) at $1,864.20 per ounce

  • 10-year cash flow (^TNX): -2.8 bps for a yield of 3.0950%

11:16 a.m. ET: Consumer 1-year inflation expectations fell in April, but still held well above historical averages

Consumer inflation expectations fell slightly in April from March but remained at historically high levels, according to new data from the New York Federal Reserve on Monday.

For next year, consumers expect inflation to rise by 6.3%, according to the April survey. However, over a three-year horizon, inflation expectations have increased by 0.2 percentage point compared to March, reaching 3.9%. The one-year and three-year wait rates were 0.3 percentage points from their all-time highs.

10:52 a.m. ET: Bitcoin falls to lowest level since July 2021, dragging crypto-related stocks down

The sell-off in risky assets extended to cryptocurrencies, with Bitcoin prices falling to their lowest level in nearly a year during Monday’s session.

Prices for the largest cryptocurrency by market capitalization fell below $33,000, or the lowest since July 2021. Ethereum also fell around 5% to trade below $2,400. Declines in some of the major tokens and alt-coins led to cryptocurrency-related stocks like Coinbase, which saw its shares drop 14% intraday to below $90 per share. Shares of Riot Blockchain fell 15.5% and shares of Marathon Digital Holdings fell 14%.

9:30 a.m. ET: Stocks open lower, holding losses overnight

Here are the top moves in the markets as of 9:30 a.m. ET:

  • S&P 500 (^GSPC): -60.53 (-1.47%) to 4,062.81

  • Dow (^ DJI): -422.40 (-1.28%) to 32,476.97

  • Nasdaq (^IXIC): -219.38 (-1.81%) to 11,925.28

  • Raw (CL=F): -$2.17 (-1.98%) at $107.60 per barrel

  • Gold (CG=F): -$13.40 (-0.71%) at $1,869.40 per ounce

  • 10-year cash flow (^TNX): -0.3 bps for a yield of 3.121%

7:43 a.m. ET Monday: Stock futures head for a lower open

Here is where the markets were trading Monday morning:

  • S&P 500 Futures Contracts (ES=F): -85 points (-2.06%) at 4,034.50

  • Dow futures contracts (JM=F): -555 points (-1.69%) to 32,254.00

  • Nasdaq futures contracts (NQ=F): -337 points (-2.65%) to 12,358.75

  • Raw (CL=F): -$2.65 (-2.41%) at $107.12 per barrel

  • Gold (CG=F): -$25.10 (-1.33%) at $1,857.70 per ounce

  • 10-year cash flow (^TNX): +5.3 bps for a yield of 3.177%

NEW YORK, NEW YORK – MAY 06: Traders work on the floor of the New York Stock Exchange (NYSE) on May 06, 2022 in New York City. After a day that saw a drop of more than 1,000 points on inflation fears, the Dow Jones Industrial Average was down more than 200 points in morning trading. (Photo by Spencer Platt/Getty Images)

Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter.

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