The S&P 500 staged a dramatic reversal in the final hour of trading to close slightly higher — after briefly dipping into bear market territory earlier in the day.
 | FRI, MAY 20, 2022 | | | |
| DOW | | NAME | LAST | CHG | %CHG | | AAPL | 137.59 | +0.24 | +0.17% | | CSCO | 42.94 | +1.22 | +2.92% | | INTC | 41.65 | -0.36 | -0.86% | |
| | S&P 500 | | NAME | LAST | CHG | %CHG | | AMD | 93.50 | -3.17 | -3.28% | | AAPL | 137.59 | +0.24 | +0.17% | | F | 12.50 | -0.35 | -2.72% | |
| | NASDAQ | | NAME | LAST | CHG | %CHG | | AMD | 93.50 | -3.17 | -3.28% | | AAPL | 137.59 | +0.24 | +0.17% | | NVDA | 166.94 | -4.30 | -2.51% | |
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Wow. The S&P 500 staged a dramatic reversal in the final hour of trading to close slightly higher — after briefly dipping into bear market territory earlier in the day. There's no official bear market designation on Wall Street. Some will count Friday's decline at the intraday lows as confirmation of a bear market, whereas some strategists may say it's not official until it closes 20% off its high. But, the downturn in the broad market index is the largest of its magnitude since the start of the pandemic in March 2020. "This week's decline felt as if the market was starting to recognize that earnings growth and S&P 500 profitability may be in jeopardy as inflation will continue to be higher throughout the year," wrote David Wagner, portfolio manager at Aptus Capital Advisors. |
The wild moves in the broad market index come as the U.S. deals with inflationary pressures it has not seen in decades — exacerbated largely by the start of the war in Ukraine which contributed to a surge in energy prices. On top of that, a more aggressive monetary policy stance by the Federal Reserve has raised more concerns over the economy tipping into a recession. The central bank hiked rates by half a percentage point earlier this month. This week, Chair Jerome Powell reiterated his comments that he will not hesitate raising rates to tamp down inflation. Rising rates first hit highly-valued tech stocks, but the selling has spread to other parts of the market. Retailers especially suffered this week after poor quarterly results from Target and Walmart cast doubt on the companies' abilities to deal with rising costs. Meanwhile, energy is the only positive S&P 500 sector for the year. "At some point the market will turn, but it won't be until these winds are shifting, inflation is coming down and consumers are feeling good about spending money again like they want to and are used to. These are pretty long cycles," said Johan Grahn, head of ETF strategy at Allianz Investment Management. |
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