Dow falls more than 600 points, S&P 500 falls below 4,000 to the lowest level in a year

Stocks fell sharply on Monday, leading the S&P 500 to break above the 4,000 level for the first time in more than a year as the market sell-off continued.

The Dow Jones Industrial Average fell 653.67 points to 32,245.70, or 1.99%. The S&P 500 fell 3.2% to 3,991.24, while the Nasdaq Composite lost 4.29% to 11,623.25.

The S&P 500 traded as low as 3,975.48 on the day, dipping below the 4,000 mark to its lowest level since March 2021 and retreating 17% from a 52-week high as traders struggled to recover from the big market swings last week. All sectors except consumer staples plunged into the red.

Amid the losses, the yield on the benchmark 10-year Treasury note hit its highest level since late 2018, trading well above 3%.

“This is a significant price revision, a significant dislocation and this is all being stimulated and driven by Fed policy,” said Jeff Kilburg of Sanctuary Wealth. “The only way I see us bottoming out in stocks in the short term, the only way I see markets healing is if the Fed has the ability with the tools in their toolbox to calm interest rates. The 10-year note must go.” below 3%”.

The rate hike continued to crush tech names like Meta Platforms and Alphabet, which lost 3.7% and 2.8%, respectively. Amazon, Apple and Netflix fell more than 5%, 3% and 4%, respectively, while Tesla and Nvidia fell more than 9% each.

The combination of high rates and a potential recession as inflation rises also affected other areas of the market. Consumer stocks like Nike suffered along with industrial stocks like Caterpillar. Bank stocks were also under pressure with Bank of America falling 2.8%.

Boeing marked the biggest loser in the Dow, down more than 10%, followed by energy leader Chevron, which fell 6.7% as US oil futures continued to slide. 3M, Walmart, Amgen and Home Depot continued to be market highlights, posting gains despite the widespread sell-off.

“We expect markets to remain volatile, with risks skewed to the downside as stagflation risks continue to rise,” Barclays’ Maneesh Deshpande wrote. “While we cannot rule out strong bear market rallies, we believe the upside is limited.”

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