SP 500 ends below 4,000 for 1st time since March 2021; growth shares lead decline

SP 500 ends below 4,000 for 1st time since March 2021; growth shares lead decline

Representative image (Source: Reuters)



The Nasdaq closed at its lowest level since November 2020. Apple shares dropped 3.3% and were the biggest weight on the Nasdaq and the S&P 500. Microsoft Corp dropped 3.7% and Tesla Inc fell 9.1%.

Investors are worried about how aggressive the Federal Reserve will need to be to tame inflation. The U.S. central bank last week hiked interest rates by 50 basis points.

Benchmark 10-year U.S. Treasury yields hit their highest levels since November 2018 before easing on Monday.

"Markets are digesting the start of a return to a more normal monetary policy environment," said Kristina Hooper, chief global market strategist at Invesco in New York.

"Moving more aggressively (on rates) raises the specter of a recession, especially with all of these complications - high inflation, Russia's invasion of Ukraine, COVID-related supply chain disruptions," she said.

Investors have also been worried about an economic slowdown in China following a recent rise in coronavirus cases.

The Dow Jones Industrial Average (.DJI) fell 653.67 points, or 1.99%, to 32,245.7, while the S&P 500 (.SPX) lost 132.1 points, or 3.20%, to 3,991.24, its lowest close since March 31, 2021.

The Nasdaq Composite (.IXIC) dropped 521.41 points, or 4.29%, to 11,623.25.

The S&P 500 is now down 16.3% for the year