Wall Street Is Now in a Bear Market

Indexes, cryptocurrencies plunge worldwide
By Newser Editors and Wire Services
Posted Jun 13, 2022 3:32 PM CDT
Wall Street Is Now in a Bear Market
In this photo provided by the New York Stock Exchange, trader Michael Conlon works on the floor, Monday, June 13, 2022.   (Courtney Crow/New York Stock Exchange via AP)

Wall Street entered a bear market Monday as the S&P 500 sank 3.9%, bringing it more than 20% below the record high it set in January. Fears about a fragile economy and stubbornly high inflation have slammed the stock market in recent days and sent Treasury yields surging to their highest levels in years, the AP reports. A report last week that inflation was getting worse, not better as many had hoped, sent a chill through markets that carried over into this week. The S&P 500 fell 151.23 points to 3,749.63. The Dow Jones Industrial Average fell 876.05 points, or 2.8%, to 30,516.74. The Nasdaq fell 530.80 points, or 4.7%, to 10,809.23.

The center of Wall Street’s focus was again on the Federal Reserve, which is scrambling to get inflation under control. Its main method is to raise interest rates in order to slow the economy, a blunt tool that risks a recession if used too aggressively. With the Fed seemingly pinned into having to get more aggressive, prices fell for everything from bonds to bitcoin, from New York to New Zealand. The sharpest drops hit what had been big winners of the easier low-rate era, such as high-growth technology stocks and other former darlings of investors. Tesla slumped 7.1%, and Amazon dropped 5.5%. GameStop tumbled 8.4%.

"The best thing people can do is to not panic and don’t sell at the bottom," says Randy Frederick, managing director of trading and derivatives at the Schwab Center for Financial Research, "and we’re probably not at the bottom." Wall Street's sobering realization that inflation is accelerating, not peaking, is also sending US bond yields to their highest levels in more than a decade. In Asia, indexes fell at least 3% in Seoul, Tokyo, and Hong Kong. Some of the biggest hits came for cryptocurrencies. Bitcoin tumbled more than 16% from a day earlier and dropped to $23,278, according to Coindesk. It’s back to where it was in late 2020 and down from a peak of $68,990 late last year. (Read more stock market stories.)

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