The market on Wall Street resumed its downward trend on Thursday, heading to bear market again. It erased the previous day’s gains and dragging the S&P 500 to a new annual low. Investors became more apprehensive that the Federal Reserve would persevere with its strategy to raise interest rates even if a recession happened.
Apple, whose stock had previously been an outperformer in a bear market, led the general slide after a major investment bank downgraded the shares. At the time of the most recent check, the stock had declined around 6%.
With a 2.9% decline, the S&P 500 reached a new yearly bear market low. The value of the technology-focused Nasdaq Composite fell 3.9%, while the Dow Jones Industrial Average fell 681 points, or 2.3%.
The Wednesday gains erased
The events followed a global rally in stocks on Wednesday, which happened after the Bank of England said that it would purchase bonds in a bid to stabilize its financial markets and the plummeting British pound’s value. In recent days, the value of the pound against the dollar has reached a new all-time low.
On Wednesday, the Dow and S&P 500 were able to end their respective six-day losing streaks with gains of over 500 points (1.9%) and over 2%, respectively.
The yield on Treasury securities has increased to around 3.75 percent. After briefly exceeding 4%, it had its worst one-day decline since 2020, as recorded the day before.
The fact that the number of individuals applying for jobless benefits exceeded expectations did not improve attitudes. This is based on the assumption that the Federal Reserve would continue to implement aggressive rate hikes to battle inflation without concern for the labor market.
The main averages are currently on track for a negative week and their worst month since June due to the Wednesday rally. The Nasdaq Composite has lost around 9% of its value this month, while the Dow and S&P are expected to conclude the month down 7% and 7.7%, respectively.
