Damian J. TRUAZ
NEW YORK (AP) – Shares fluctuated in trading on Wall Street on Thursday as steadily high inflation continues to put pressure on the economy and keeps major indexes in deep decline.
The S&P 500, a benchmark for many index funds, is coming out of its biggest drop in almost two years. It weakened the early date and fell 0.1%. It fell by about 18% from the record level set earlier this year. It’s just ashamed of the 20% point that defines the bear market. The last bear market took place just two years ago, after the start of the virus pandemic.
The Dow Jones industrial average fell 210 points, or 0.7%, to 31,277 as of 12:22 p.m. in the east, and the Nasdaq was up 0.7%.
Rising interest rates, high inflation, the war in Ukraine and the slowdown in China’s economy have forced investors to reconsider the prices they are willing to pay for a wide range of stocks, from high-tech companies to traditional automakers. Investors were concerned that sharp inflation, which harms people who buy groceries and refuel their cars, also reduces companies ’profits.
Target fell another 4.6% the day after losing a quarter of its value due to a surprisingly weak earnings report.
Wall Street is also concerned about the Federal Reserve’s plan to fight the highest inflation in four decades. The Fed is aggressively raising interest rates, and investors are worried that the central bank could cause a recession if it raises rates too high or too fast.
The 10-year Treasury fell to 2.83% from 2.88% at the end of Wednesday, but overall it is growing as investors prepare for a market with higher interest rates. It has also boosted mortgage rates, contributing to a slowdown in home sales.
A bunch of fears on Wall Street have caused very volatile trade and large fluctuations between gains and losses throughout the day.
Technology stocks were among the most volatile holdings. The sector includes heavyweights such as Apple who have high scores, which tend to push the market harder up or down. This sector has been particularly hard hit by changing Fed policies to raise interest rates. Low rates help support investments that are considered more risky, like technology stocks, and higher rates reduce the incentive to take that risk.
Technology stocks on Thursday were mixed, contributing to a market crash. Cisco Systems fell 14.2% after the router and switch vendor lowered its profit forecast amid supply chain constraints. The synopsis jumped 12% after the software company raised its financial forecasts for the year.
Household goods companies, grocery store operators and food producers have declined significantly. General Mills fell by 3.5% and Clorox – by 4.6%.
Retailers and other companies that rely on direct consumer spending were mostly higher. Amazon rose 1.6% and Expedia 6%. Bath & Body Works fell 8.1% after lowering its profit forecast for the year. Amazon has risen 1.4%.