Worries over high inflation continued to weigh on Wall Street Monday, as financial markets extended their slide and the S&P 500 crossed a key bear-market indicator.
The S&P 500 index, which comprises 500 large public U.S. companies, was down 3.7% as of 11:15 a.m. ET. Year to date, the index currently is off 21.6%, surpassing the 20% threshold that is the unofficial signal of a bear market.
The broad stock sell-off — with every stock in the S&P 500 dropping Monday — comes after the U.S. experienced its highest rate of inflation in May 2022 in four decades. The Dow Jones Industrial Average declined 2.8%, or nearly 900 points, in Monday trading, and the tech-centric Nasdaq Composite Index was down 4.5%.
Media and tech stocks have been sucked down in the market drop, with Monday’s losers including Disney (-3.8%), Netflix (-6%), Warner Bros. Discovery (-6.3%) and Paramount Global (-6.3%).
Shares of Live Nation Entertainment dropped more than 7%, and the stock is down 30% year to date. Tech shares sliding in Monday trading included Apple (-2.3%), Amazon (-5.8%), Meta Platforms (-4.5%) Alphabet (-3.2%) and Twitter (-4.5%).
The steep market drops in 2022 have wiped out billions of dollars in market value. Netflix has shed more than $190 billion in market capitalization (to currently below $80 billion). Disney’s market cap is about $175 billion today, a loss of some $110 billion year to date. Meta, parent company of Facebook and Instagram, has seen its market value halved this year, to around $454 billion.
Investors are expecting the Federal Reserve to announce Wednesday that it will raise interest rates more aggressively than the half-point hike that was previously signaled, per the Wall Street Journal. the Labor Department on Friday morning reported the fastest annual increase in the consumer-price index in May 2022 — up 8.6% compared with a year earlier — since 1981.
Cryptocurrency values are also crashing, with Bitcoin hitting an 18-month low and dropping 17% since December 2020, per Bloomberg.
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