Stocks fell again on
Investors have grown increasingly worried about rising inflation and how aggressive the
The S&P 500 fell 84.79 points, or 1.9%, to 4,397.94. The benchmark index has now slipped three straight weeks to start the year. It fell 5.7% this week, its worst weekly decline since March of 2020 when the pandemic sent stocks into a bear market.
The Dow Jones Industrial Average fell 450.02 points, or 1.3%, to 34,265.37 and also fell for its third straight week.
The tech-heavy Nasdaq fell 385.10, or 2.7%, to 13,768.92. With investors expecting the Fed to begin raising rates as soon as its March policy meeting, shares in pricey tech companies and other expensive growth stocks have looked relatively less attractive. The index has fallen for four straight weeks and is now more than 10% below its most recent high, putting it in what
“As always, once the volatility starts, investors pile on exacerbating the downward volatility,” said
Technology and communications stocks were among the biggest drags on the market Friday. Streaming video service
Inflation fears and concerns about the impact of higher interest rates have prompted a shift in the broader market after a solid year of gains in 2021. Technology stocks and consumer-focused companies have fallen out of favor. Energy is the only S&P 500 sector showing a gain; household good makers and utilities, which are typically considered less-risky investments, held up better than the rest of the market.
Supply chain problems and higher raw materials costs have prompted companies in a wide range of industries to raise prices on finished goods. Many of those companies have warned investors that their profit margins and operations continue feeling the pinch in 2022.
Rising costs have raised concerns that consumers will start to ease spending because of the persistent pressure on their wallets. The government’s retail sales data for December showed an unexpected decline in spending.
“The market is working through digestion of how much monetary policy change will occur over the course of 2022,” said
Investors will be watching the closely when Fed officials meet for their latest policy meeting next week. Some economists are concerned the central bank has been to slow to act to fight inflation. Consumer prices rose 7% in December compared to a year earlier, the biggest increase in nearly four decades.
“In our view, the biggest near-term risk is right in front of us: that the Fed is seriously behind the curve and has to get serious about fighting inflation,” economists at
Investors have also been busy reviewing the latest round of corporate earnings, which could give them a better sense of how companies are dealing with persistent supply chain problems and higher costs.
Paint and coatings maker
Peloton rose 11.7% after the maker of exercise bikes and treadmills said fiscal second-quarter revenue would meet previous estimates. The stock tanked a day earlier after CNBC reported Peloton was temporarily halting production of exercise equipment to stem a decline in sales.
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