Wall Street Continues to Reel
On Monday, Wall Street's losing streak extended to the fourth week, and the S&P 500 fell deeper into its worst decline since the early days of the pandemic.
On Monday, the financial markets were in upheaval, with Wall Street's losing streak entering its fourth week and the S&P 500 dropping even farther into its worst dip since the epidemic's onset.
According to Bloomberg, the benchmark index fell 1.8 percent in early trading, placing it more than 10% below its all-time high set in early January. A correction is defined as a 10% drop in the stock market. It is seen as an indication of a shift in attitude as the market adjusts to a new outlook on the economy and corporate profitability.
Because stock and bond market investors think the Federal Reserve will need to raise interest rates quickly this year to keep inflation under control, the stock and bond markets have made the required adjustments. Equities sank sharply in the first three weeks of this year, even before the sudden reversal in this anticipation became obvious.
Further details of the Federal Reserve's policy decision, which is aimed to lower the worrying rate of inflation, are expected to be disclosed when the policy committee meets on Tuesday and Wednesday. On Wednesday, a statement will be issued. Economists predict that the Federal Reserve's chairman, Jerome H. Powell, will announce the central bank's first interest rate hike in March.
On Monday, the stock market's drop coincided with an uptick in concerns over Russia's and Ukraine's rising tensions. In a striking break from the administration's historically cautious attitude to the Ukraine crisis, the White House is considering deploying troops, as well as warships and aircraft, to NATO allies in the Baltics and Eastern Europe.
Increased tension in the region threatens Europe's energy supply since the continent relies on Russia for natural gas and oil. As a consequence of the news, the Stoxx Europe 600 index plummeted 3%.
According to Fiona Cincotta, an analyst at City Index, "the dual whammy of risk events is proving too much for Wall Street to bear, with the Nasdaq once again leading the charge down as the tech implosion intensifies."
On Monday, the Nasdaq composite, strongly weighted toward technology and is already in a downturn, fell more than 2%.