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S&P500 Slides Into Correction Zone: Dow Drops 400 Points On Day Seven

Dow Jones fell more than 1,000 points on Monday, fueled by investor concerns about mounting inflation, rising interest rates and tensions as Russia looks poised for a large-scale invasion of Ukraine.

The index fell more than three percent, continuing its seven-day losing streak, which analysts blame for expected international conflicts coupled with a higher cost of living.

The S&P500 also tested investors’ nerves as it fell for the fifth straight day, losing more than three percent by midday. It is down more than 11 percent in the past month.

Stocks extended their three-week decline on Wall Street, putting the benchmark S&P 500 on track for a so-called correction — a decline of 10 percent or more from its most recent high.

Bitcoin was hit particularly hard by the market instability, at one point diving below $33,000 and dropping its value by more than half since its all-time high of $68,990.90 last November.

SP500 Slides Into Correction Zone Dow Drops 400 Points On

The S&P 500 fell for the fifth consecutive day, losing more than three percent by midday.  It's down more than 11 percent in the past month

The S&P 500 fell for the fifth consecutive day, losing more than three percent by midday.  It's down more than 11 percent in the past month

The S&P 500 fell for the fifth consecutive day, losing more than three percent by midday. It’s down more than 11 percent in the past month

S&P 500 is now headed for a so-called correction - a drop of 10 percent or more from its most recent high

S&P 500 is now headed for a so-called correction - a drop of 10 percent or more from its most recent high

S&P 500 is now headed for a so-called correction – a drop of 10 percent or more from its most recent high

About $130 billion has been lost in the cryptocurrency market in the past 24 hours. CNBC reported.

Monday’s market slump lagged behind last week’s poor performance as Nasdaq posted its worst week since March 2020. 10-year Treasury yields also fell, a sign of investor concern about the economy.

Stocks fell sharply during the first weeks of 2022 as the market geared up for the Fed to raise interest rates to offset inflation; the central bank has kept short-term interest rates close to zero since the pandemic hit the global economy in 2020.

A key Fed policy meeting this week will determine how aggressively the central bank wants to raise interest rates.

It will release its new policy statement on Wednesday, and investors are concerned it could include some rate hikes throughout the year as America grapples with record inflation.

Some economists have expressed concern that the Fed is acting too late to combat high inflation.

Other economists say they are concerned that the Fed will act too aggressively. They argue that numerous rate hikes could trigger a recession and not slow inflation.

Annual inflation reached seven percent in December — the highest rise since 1982, and Americans are feeling the pressure at gas pumps, supermarkets and more. The higher cost of living has wiped out any salary increases Americans have seen during the pandemic, making it harder for families to make ends meet.

Bitcoin was hit particularly hard by the market instability, at one point diving below $33,000 and dropping its value by more than half since its all-time high of $68,990.90 last November.

Bitcoin was hit particularly hard by the market instability, at one point diving below $33,000 and dropping its value by more than half since its all-time high of $68,990.90 last November.

Bitcoin was hit particularly hard by the market instability, at one point diving below $33,000 and dropping its value by more than half since its all-time high of $68,990.90 last November.

Monday's market slump lagged behind last week's poor performance as Nasdaq posted its worst week since March 2020.  Traders are pictured on the New York Stock Exchange on January 21, 2022

Monday's market slump lagged behind last week's poor performance as Nasdaq posted its worst week since March 2020.  Traders are pictured on the New York Stock Exchange on January 21, 2022

Monday’s market slump lagged behind last week’s poor performance as Nasdaq posted its worst week since March 2020. Traders are pictured on the New York Stock Exchange on January 21, 2022

Brutal declines in the market are also fueled by concerns that Russia will launch a large-scale invasion of Ukraine, sparking geopolitical conflict in the US, which has supplied Ukraine with boatloads of weapons.

Sebastien Galy, senior macro strategist at Nordea Asset Management, said a conflict could spark a market turmoil in the US, including by shutting Russian banks out of the US financial system.

‘The closer you get to the cliff, the more nervous’ [the market] is,” Galy . told The Wall Street JournalI. “We don’t have the information to trade.”

For some, the depressed market was the early sign of a doomsday market.

British investor Jeremy Grantham, a notorious lifelong bear who constantly claims corrections are imminent, claimed this week that the US is in a ‘super bubble’ of assets that will soon collapse spectacularly.

1642898332 Bitcoin Nearly Halves From Its High And Nasdaq Posts Worst

1642898332 Bitcoin Nearly Halves From Its High And Nasdaq Posts Worst

The tech-heavy Nasdaq, which has fallen for four weeks in a row, also fell Monday as it lost more than 500 points.

Technology stocks led the broader market decline as investors shift money away from more expensive stocks in anticipation of rising interest rates. Higher interest rates make stocks in high-flying technology companies and other expensive growth stocks relatively less attractive.

Apple fell 3.3 percent and Microsoft lost 4.8 percent. The tech sector is by far the largest in the S&P500 and is down more than 15 percent so far this year.

The tech sell-off has hit the country’s top tech billionaires hard, with Elon Musk, Jeff Bezos, Larry Page, Bill Gates and Mark Zuckerberg collectively losing $67 billion in the past week.

Telsa CEO Musk took the biggest blow, with his net worth falling $25.1 billion, or more than 9 percent, over the course of the week, according to the report. Bloomberg Billionaires Index.

The European STOXX 600 index closed 3.6% lower on concerns about Fed tightening and worries about the situation around Ukraine. The Russian ruble has also fallen.

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