The S&P 500 is on the brink of a bear market. Here’s the threshold.


The latest US stock market is still on the verge of expiring, with the S&P 500 as a benchmark right next to the threshold for bearish territory.

The S&P 500 SPX,
-0.13%
ended 0.1% lower on Wednesday, at 3,930.08, after falling to a 3,858.87 session low. This was the lowest closing in the index since March 25, 2021, leaving it 18.1% below its record high since early January. A close below 3,837.25 would mark a 20% drop, according to Dow Jones Market Data, fulfilling the widely used technical definition of a bear market.

The S&P 500 entered correction territory, a 10% drop from a recent peak last month, its second foray this year. A tough April for equities has been followed by an ugly May, with stocks suffering as investors continue to launch large-cap technology stocks and other high-flying pandemic estimates amid investor concern over inflation that continues to rise historically and a Federal Reserve that is moving to rise rapidly. interest rates and otherwise tighten monetary policy in an effort to control these price pressures.

Hope that a long-awaited reading on Wednesday about consumer price inflation showed that inflation had peaked and would help stabilize the ship offered little consolation to restless investors. Although the annual rate of inflation slowed to 8.3% from 8.5% in March, it was still warmer than the 8.1% reading expected by economists. In addition, a basic reading of the CPI, which eliminates food and energy, showed an unexpected monthly increase.

Reads: What’s next for stocks and bonds after inflation data doesn’t provide the “turning point”

As of Thursday, the S&P 500 was down 4.9% in May, while the technologically powerful Nasdaq Composite COMP
+ 0.06%,
which entered a bear market earlier this year, had fallen 7.8% and the Dow Jones Industrial Average DJIA top tier,
-0.33%
it was down about 3.8%.

Dow Jones Market Data

The S&P 500 ended its last bullish market on March 12, 2020, as the COVID-19 pandemic erupted. The pandemic-inspired bear market bottomed out on March 23, 2020, and the S&P 500 fell 33.9% from the February 19, 2020 high.

According to figures from 1929, the average bear market is down 33.5% and the average is down 33.2%, according to Dow Jones Market Data. On average, the S&P 500 has taken 80 trading days to reach its minimum after entering a bear market, and an average of 52 trading days, the data showed.



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