Strong headwinds in the global economy have wiped out the $7 trillion market value of blue-chip stocks in the S&P 500. Since late December last year, the index has fallen about 18%. After falling 0.1% Thursday, May 12, the S&P 500 is now just above bear market levels, down 20% from a recent closing high.
The Dow Jones, which fell about 104 points, or 0.3%, on Thursday May 12, is down more than 13% this year.
Read also | Now SEC investigations have delayed disclosure of Elon Musk’s initial Twitter stake, report says
Tech stocks were hit hard. The Nasdaq managed a slight rise on Thursday, but is still down 27% this year, putting it in market territory, according to US media. The tech sector is responsible for about $3 trillion of the S&P 500’s decline in market capitalization.
According to analysis by Bespoke Investment Group, a research firm, the Nasdaq has fallen more than 20% in the past 30 trading days. According to the company, a decline of this magnitude only occurred 11 times earlier, and nine of those declines were “recession-related.”
Watch | Gravitas: worst day for global markets since June 2020
Shares of many tech leaders such as Apple (AAPL), Microsoft (MSFT), Google owner Alphabet (GOOGL) and Tesla (TSLA) are all deep red. However, Netflix (NFLX) is the worst performer in the S&P 500 in 2022, down more than 70%, CNN Business reported.
The sharp drop worries Main Street, which worries that the U.S. economy is losing steam after a remarkable rebound from the pandemic-induced recession.
Read also | Biden Sets Inflation Agenda; discusses the end of Chinese tariffs
Investors are now waiting for capitulation, the moment when it seems like everyone has completely given up. When sentiment seems to be at rock bottom, it might be time to start buying them again.
(With agency contributions)