The brutal market sell-off pushed the S&P 500 into bear market territory shortly on Friday, and the route could turn out to be a lot worse if history is any guide. The S&P 500 index fell as much as 2.3% at session lows, bringing the benchmark 20.9% lower from its January intraday high. The index ended up closing a wild day flat, 19.2% below its record high. There is no official bear market designation on Wall Street. Some would count Friday’s drop to the day’s low as confirmation of a bear market, while others might say it’s unofficial until the index actually closes 20%. compared to its high. There have been 14 market declines since World War II, and the S&P 500 has fallen an average of 30%, and recessions have lasted an average of 359 days, according to Bespoke Investment Group, according to Bespoke Investment Group. Group. We’re just 136 days away from the S&P 500’s intraday record as soon as 2022 begins. Investors have had the edge since the Federal Reserve raised its benchmark interest rate by half a percentage point this month, the most drastic step in its fight against the highest inflation in 40 years. The currency tightening only adds to the list of worries for investors, from the war in Ukraine, the path of the pandemic in China and global supply chain problems. On Wednesday, the S&P 500 suffered its worst one-day drop since June 2020, losing about 4%. The roadmap comes after consecutive quarterly reports from Target and Walmart showing higher fuel costs and curbing consumer demand weighed on results amid the hottest inflation in decades. Ryan Belanger, founder of Claro Advisors, said: “The stock market will remain in a state of purgatory until the Federal Reserve quells inflation with higher interest rates, which cools demand. consumer demand for goods, services, housing and hotel rooms”. The tech-heavy Nasdaq Composite has been hit even harder as rates rallied, down 27.4 percent so far and down 30 percent from a record high hit last November. “Investors should be familiar with the upward and downward movements in equities, which often occur during times of tremendous uncertainty,” Belanger said.
