Stocks inch up after sell-off pushes S&P 500 into bear market & More Trending News

“Investors look as if they increasingly fear the central bank will become more aggressive with the pace of interest rates to try and curb inflation, given May’s cost of living figures were higher than expected,” Russ Mould, funding director at AJ Bell, stated in commentary Tuesday. “A decision to raise rates by more than half a percentage point could cause chaos on the markets and put a bigger dent into investors’ portfolios than they’ve already seen this year.”

The S&P 500, which plunged 3.9 p.c Monday to push into a bear market — outlined as a 20 p.c drop from a current excessive — edged up 0.5 p.c after opening bell Tuesday. The tech-heavy Nasdaq rebounded 0.7 p.c after dropping greater than 4.7 p.c the day earlier than. The Dow Jones industrial common edged up 0.2 p.c.

The three indexes come into Tuesday’s session with deep deficits on the yr: The S&P 500 has slumped 21 p.c in 2022 and the Dow 16 p.c. The Nasdaq, deep into its personal bear market, has shed practically 31 p.c.

Cboe’s volatility index, referred to as Wall Street’s “fear gauge,” is up 92 p.c for the yr in accordance with MarketWatch.

“Fears of stagflation have hit the highest level since 2008, while global economic growth optimism has sunk to a record low,” Ivan Feinseth, chief funding officer at Tigress Financial Partners, stated Tuesday in commentary.

What is stagflation? Here’s why it issues and what you need to know.

Cryptocurrencies continued their precipitous plunge as buyers flocked for safer floor, with bitcoin careening beneath $22,000. Back in November, it was buying and selling above $65,000.

Coinbase, the most important cryptocurrency buying and selling platform, introduced Tuesday that it will slash its workforce by 18 p.c — at the least 1,000 positions by present head counts — because it prepares for an additional attainable recession and “crypto winter,” in accordance with chief govt Brian Armstrong. The firm’s shares slumped 7 p.c in early buying and selling.

Armstrong’s feedback echo these of Jamie Dimon, Elon Musk and different executives which have been signaling warning concerning the state of the financial system. More than 15,000 tech employees have been laid off final month in accordance with information from Layoffs.fyi, the best for the reason that early days of the pandemic.

2022 has already delivered a nonstop storm of uncertainty for buyers and firms, from a vexed provide chain to labor shortages, hovering costs and the huge fallout from the battle in Ukraine. Now, the outlook is simply getting harder, dragging down even huge names that appeared Teflon all through a lot of the pandemic: Amazon’s shares are down practically 40 p.c for the yr; Tesla, 46 p.c; Meta, 51 p.c; and Peloton 72 p.c.

In May, client costs shot up one other 1 p.c in contrast with April to a pandemic-era peak of 8.6 p.c in accordance with information from the Bureau of Labor Statistics, as hovering power, housing and meals costs drive up prices on the quickest tempo in 40 years.

Wholesale costs are up 10.8 p.c from a yr in the past, in accordance with a contemporary studying of the Producer Price Index on Tuesday, close to a file annual tempo as inflation places stress on each rung of the provision chain. Transportation and warehousing prices jumped 2.9 p.c, suggesting provide chain pressures will proceed to weigh on companies and shoppers.

Consumer spending is the first engine of the U.S. financial system, powering roughly 70 p.c of the nation’s gross home product. But proof is mounting that households are being compelled to chop again amid the surging costs; client sentiment plummeted 14 p.c in May to a file low in accordance with the University of Michigan’s client sentiment index.

The nationwide common for gasoline surpassed $5.01 Tuesday, one other contemporary excessive in accordance with information tracked by AAA. A yr in the past, the nationwide common was $3.08.