Shares fell sharply on Monday as investors reacted to increased lockdowns in China amid other risks to the market. The largest technology companies in the world have lost more than $1 trillion. over the last three trading days. Oil fell sharply.
Stocks continued their steep decline on Monday, signaling a loss of investor confidence amid rising economic risks, while bond yields remain close to their highs.
At the same time, futures for indices rose on Tuesday, which confirms the continued high volatility of the market.
At the close of trading on Monday:
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S&P 500 fell 3.2% to 3991.23
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The Dow Jones Industrial Average fell 1.99%, down more than 12% from a 52-week high
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The tech Nasdaq Composite shed 4.29%, down more than 27% from a 52-week high.
Market participants abandon risky assets or assets with high volatility.
Technology stocks have suffered more than other sectors of the economy due to rising interest rates and the Fed's plans to tighten monetary policy further through the end of the year in the fight against inflation.
The largest technology companies in the world have lost more than $1 trillion. over the last three trading days.
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Apple (AAPL), the world's most valuable public company, has lost $220 billion since the close of trading on Wednesday when the Fed raised rates, saying inflation was too high.
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Microsoft (MSFT) lost about $189 billion over the same period.
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Tesla (TSLA) lost $199 billion in market value, the company's valuation fell below $1 trillion.
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Market capitalization of Amazon (AMZN) decreased by $173 billion.
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Alphabet (GOOGL, GOOG), Google's parent company, was worth $123 billion less on Monday than it was last week.
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Nvidia semiconductor company (NVDA) lost $85 billion.
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Meta Platforms (FB), the parent company of Facebook, lost $70 billion in value.
Wall Street Analyst Predictions
Frank Cappelleri, chief market officer at Instinet, believes that the stock market has not yet finished reflecting the full range of risks and, following this fall, the S&P 500 stocks could fall by another 13%. The opinion of other experts is close to Cappelleri.
“We definitely believe there will be at least one more downside,” wrote Matthew Tuttle, chief investment officer at Tuttle Capital Management.
Tom Essay, founder of Sevens Report Research, wrote that the current market is exhibiting "the emotions of fear and greed that drive intraday trading, and we should all brace ourselves for higher volatility going forward."
Market risks are not limited to Fed policy. Russia's war with Ukraine shows no signs of ending as news broke on Monday that Shanghai was stepping up lockdowns as part of its anti-coronavirus policy.
"Investors are concerned about the slowdown and the economy," wrote Solita Marchelli, chief investment officer of UBS's Americas Global Wealth Management.
The situation in China is putting downward pressure on oil demand, with the price of WTI crude falling more than 6% to just under $103 a barrel.
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