Wall Street Losses Rise As Global Markets Stumble

Stocks racked up more losses on Wall Street Monday (Tuesday, May 10, 2022, in Manila), leaving the S&P 500 at its lowest point in more than a year, Stan Choe and Alex Veiga reported for the Associated Press (AP).

Photo Insert: The S&P 500 fell 132.10 to 3,991.24. The Dow dropped 653.67 points to 32,245.70. The Nasdaq slid 521.41 points to 11,623.25.

The sell-off came as renewed worries about China’s economy piled on top of global financial markets already battered by rising interest rates. The S&P 500 tumbled 3.2%, deepening its losses following five straight down weeks, its longest such streak in more than a decade.

The Dow Jones Industrial Average fell 2% and the Nasdaq pulled back 4.3% as tech-oriented stocks again took the brunt of the selling. Monday’s sharp drop leaves the S&P 500, Wall Street’s main measure of health, down 16.8% from its record set early this year.

The S&P 500 fell 132.10 to 3,991.24. The Dow dropped 653.67 points to 32,245.70. The Nasdaq slid 521.41 points to 11,623.25. Smaller company stocks also fell broadly. The Russell 2000 gave up 77.48 points, or 4.2%, to 1,762.08.

Most of this year’s damage has been the result of the Federal Reserve’s aggressive flip away from doing everything it can to prop up financial markets and the economy. The central bank has already pulled its key short-term interest rate off its record low near zero, where it sat for nearly the entire pandemic.

Last week, it signaled additional increases of double the usual amount may hit in upcoming months, in hopes of stamping out the high inflation sweeping the economy.

The moves by design will slow the economy by making it more expensive to borrow. The risk is the Fed could cause a recession if it raises rates too high or too quickly. In the meantime, higher rates discourage investors from paying very high prices for investments, because investors can get a better return from owning super-safe Treasury bonds than they could just a few weeks ago.

That’s helped cause a roughly 29% tumble for bitcoin since April’s start, for example. It dropped 9.7% Monday, according to Coindesk.

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