It was another bearish trading week for U.S. stocks as the major indexes have returned to losing ways as they are now on their third week of consecutive decline.
The New York Stock Exchange (NYSE) All Share Index (ASI) lost 6.62% for the week, its largest weekly decline it has seen for the year so far. The NYSE is now on a three-week losing streak. It opened, trading at 15,096.70 basis points and it closed the week trading at 14,097.00 basis points. Of the five trading sessions seen during the week, the NYSE posted gains for only one of the trading sessions of week, with the bears dominating the market.
The NASDAQ also ended bearish as it posted losses of 4.78% during the week under consideration. It started at a basis point of 10,986.84 and ended the week at 10,798.35 basis points. The week in question saw an increase in the volume of transactions against the previous week by 164.15% as the market recorded a volume of 2.80 billion.
The Dow Jones and the S&P 500 also posted losses of 4.80% and 5.79% respectively. Both are on a three-week losing streak as well.
US stocks suffered their biggest weekly percentage decline in two years as investors wrestled with the growing likelihood of a recession while global central banks tried to stamp out inflation.
Stubbornly high inflation rates have caused panic in the minds of investors this year because of the U.S. Federal Reserve, along with most major central banks, beginning to pivot from easy monetary policies to tightening measures which will slow the economy, possibly causing a recession and potentially dent corporate earnings.
Several key pieces of economic data missed forecasts during the week, ranging from retail sales to housing starts and the Federal Reserve raised its benchmark interest rate by 75 basis points, the most since 1994. The Dow Jones again closed under the 30,000 BP after dipping below that level on Thursday for the first time since January 2021.
US Stock Market Gainers For Third Week In June
The Dow closed down 4.8% for the week, its 11th losing week out of 12, while the S&P 500 slumped 5.8% and the tech-heavy Nasdaq also fell 4.8%. Each of the three major Wall Street indexes fell the third week in a row.
The Federal Reserve on Wednesday implemented its largest interest rate hike since 1994, taking the threat of inflation seriously by intensifying its campaign against surging prices. According to Fed Chair, Jerome Powell, who is just beginning to show his aggressive side, explained that another 75 basis point hike – or a 50 bps move – is also in the cards for the meeting in July. Stocks initially climbed into the close in somewhat of a relief rally, but a bloodbath rocked Wall Street in the following session.
Powell explained, “We don’t seek to put people out of work. Of course, we never think too many people are working and fewer people need to have jobs, but we also think that you really cannot have the kind of labor market we want without price stability. It’s not going to be easy, and it may well depend, of course, on events that are not under our control.”