The three major U.S. stock markets fell sharply on May 9, with the market sell-off sending the Dow down more than 600 points and the S&P 500 falling below 4,000 for the first time in more than a year.

The Dow Jones Industrial Average fell to 32,245.70 points, down 1.99 percent. The Nasdaq Composite Index fell 4.29 percent to 11,623.25 points. The Standard & Poor’s 500 Index fell 3.2 percent to close at 3,991.24 points.

Because the Federal Reserve unleashed aggressive monetary tightening last week, investors were apprehensive in anticipation of more inflation data and corporate 1Q financial statement data, and stocks saw a new wave of fierce selling on Monday.

The Volatility Index (VIX) rose above 34, well above its long-term average (around 20.) The 10-year Treasury yield exceeded 3%, reaching its highest level since late 2018.

The stock market saw stocks fall into the red in almost all sectors except consumer goods. Rising interest rates continued to weigh on technology stocks, while consumer stocks in other sectors suffered along with industrials and banking stocks were also under pressure.

Boeing plunged more than 10 percent on Monday, the most significant drop in the Dow, followed by Chevron, the leading energy company.

Barclays’ Maneesh Deshpande said markets are expected to remain volatile as stagflation increases, and risks are expected to be skewed to the downside.

CNBC reported that Monday’s move came after a volatile week of daily fluctuations on Wall Street, as investors weighed the prospect of rising interest rates and slowing economic growth.

Jeff Kilburg of investment firm Sanctuary Wealth said Monday’s market performance was a major repricing, mainly due to the Federal Reserve’s monetary tightening announcement last week.

The Wall Street Journal reports that the volatility in the market since 2022 reflects a range of investor concerns. Inflation in the United States is climbing at the fastest pace in decades, which has forced the Federal Reserve to initiate the most aggressive monetary tightening since the 1980s. Investors questioned whether the Federal Reserve would be able to complete its planned process of raising interest rates and reducing its balance sheet without sending the economy into recession.

According to an April survey by The Wall Street Journal, economists estimate that the U.S. economy will fall into recession sometime in the next 12 months at 28 percent, up from 18 percent in January.


Translated/Edited by: Lish
Published by:Wenwu

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