December 7, 2022

The S&P 500 has plunged into a new two-year bear market

  • The S&P 500 hit its lowest price since November 2020
  • Rate sensitive technology, growth stocks return to gains
  • Energy stocks among rare gainers
  • Indexes down: Dow 0.56%, S&P 0.48%, Nasdaq 0.20%

Sept 27 (Reuters) – Wall Street’s major indexes plunged deeper into a bear market on Tuesday, as stocks fell on an early rally after Federal Reserve policymakers suggested more interest rate hikes despite the risk of slowing economic growth.

The benchmark is the S&P 500 (.SPX) Gains of up to 1.7% were erased in afternoon trade, hitting lows last seen in late November 2020. read more

St. Louis Fed President James Bullard made a case for more rate hikes, while Chicago Fed President Charles Evans said the central bank should raise at least another percentage point this year. read more

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Analysts at Wells Fargo now see the US central bank taking the target range for the Fed funds rate to 4.75%-5.00% in the first quarter of 2023. read more

“This is a continuation of Jerome Powell’s dig, which is trying to communicate to the markets, investors and the world that we have to keep raising rates to get this inflation story out of check. It will be interesting to see if the markets end in the red today,” said Brandon, director of general investments at Kitestone Capital Management. Bissuro said.

Bissuro warned of more pain for stocks, saying “the worst is ahead of us, not behind us.”

Most S&P 500 sector indexes fell, along with the energy sector (.SPNY) Clinging to gains of 1.19%.

Rate-sensitive stocks include Amazon.com Inc, Apple Inc, Microsoft Corp, Meta Platforms Inc (META.O) and Tesla Inc (TSLA.O)Early gains shed.

The benchmark US 10-year Treasury yield hit its highest level in more than 12 years amid hawkish comments from Fed officials.

At 12:31 pm ET, the Dow Jones Industrial Average (.DJI) The S&P 500 was down 164.66 points, or 0.56%, at 29,096.15. (.SPX) The Nasdaq Composite was down 17.49 points, or 0.48%, at 3,637.55. (.IXIC) It was down 21.24 points or 0.20% at 10,781.68.

Worries about corporate profits being hit by rising prices, an economic slowdown and higher interest rates have rocked Wall Street over the past two weeks.

Analysts cut S&P 500 earnings expectations for the third and fourth quarters and for the full year. Profits for S&P 500 companies rose just 4.6% year over year in the third quarter, compared with the 11.1% growth expected in early July. read more

Declining issues outnumbered advancing ones on the NYSE by a 1.29-to-1 ratio. Advancing issues outnumber decliners by a 1.01-to-1 ratio on the Nasdaq.

The S&P index posted no new 52-week highs and 113 new lows, while the Nasdaq posted 24 new highs and 323 new lows.

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Reporting by Angika Biswas, Sreyashi Sanyal and Susan Mathew in Bangalore; Editing by Shaunak Dasgupta and Arun Koiyur

Our Standards: Thomson Reuters Trust Principles.