Topline
Stocks swung wildly yet again on Tuesday—a day after the three major indexes mounted an historic comeback from steep losses—as investors remain nervous about surging rates and await clues from the Federal Reserve on how the central bank will deal with inflation.
The stock selloff on Wall Street continues amid rising uncertainty around geopolitical tensions and ... [+]
Key Facts
The Dow Jones Industrial Average fell 0.2%, nearly 100 points, while the S&P 500 fell 1.2% and the Nasdaq Composite 2.3%.
Stocks staged an afternoon comeback for the second day running, with the Dow paring back a more than 800 point loss at its low point.
Tuesday’s moves followed a wild session in which the market staged one of its biggest comebacks in history, despite the Dow at one point being down 1,100 points and the Nasdaq as much as 4.9%.
The S&P 500 briefly hit correction territory both on Monday and Tuesday—with the index falling 10% below its record high at the start of 2022—before rebounding.
Government bond yields like the U.S. 10-year Treasury note moved higher Tuesday, putting added pressure on hard-hit tech stocks as investors focus on the Fed meeting and ongoing geopolitical tensions between Russia and Ukraine.
Investors remain jittery as they await results from the Federal Reserve’s two-day policy meeting which kicked off on Tuesday, as the central bank cuts back on stimulus and prepares to raise interest rates in a bid to control surging inflation.
Surprising Fact:
The market is on pace for its worst month since March 2020, when the U.S. economy fell into a recession during coronavirus pandemic shutdowns.
Key Background:
All three major indexes are off to a dismal start this year. The S&P 500 is likely to fall back into correction territory on Tuesday, down more than 10% from its record high on January 3, 2022. The Dow has fallen nearly 8% so far this month, while the Nasdaq was the first index to hit correction territory last week, now down around 15% from record highs last November.
Crucial Quote:
“Fears of rising rates and the Federal Reserve… have caused most of the market jitters, though earnings season—albeit in the very early stages—hasn’t helped either,” says Jeff Buchbinder, equity strategist for LPL Financial. “This pullback in the S&P 500 could easily go to 10%, or even a little more,” he predicts.”
What To Watch For:
What could happen to stocks if Russia invades Ukraine. “As devastating as a major conflict could be... the truth is stocks likely will be able to withstand the geopolitical struggle,” according to Ryan Detrick, LPL Financial’s chief market strategist.
Further Reading:
Stock Market ‘Panic Is Setting In’ As S&P 500 Briefly Enters Correction Territory Then Rebounds (Forbes)
Netflix Stock Crashes As Nasdaq Has Worst Week Since October 2020 (Forbes)
Here’s How Much More Big Banks Spent Last Quarter Amid Rising Inflation Pressures (Forbes)
Here’s What Happens To The Stock Market If Republicans Take Congress In November (Forbes)
