Big slump: US stock markets lost more than $7 trillion this year
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The Nasdaq managed a small rise on Thursday, but it is still down 27 per cent this year, placing it in market territory
The strong headwinds in the global economy have wiped off a whopping $7 trillion in market value from blue chip stocks in the S&P 500. Since the end of December last year, the index has dropped approximately 18 per cent. Following a 0.1 per cent fall on Thursday (May 12), the S&P 500 is now just beyond bear market levels, that is 20 per cent drop from a recent closing high.
The Dow, which fell about 104 points, or 0.3 per cent, on Thursday (May 12), is down more than 13 per cent this year.
Technology stocks have been hit very bad. The Nasdaq managed a small rise on Thursday, but it is still down 27 per cent this year, placing it in market territory, according to US media reports. The tech sector is responsible for about $3 trillion of the S&P 500’s market cap decline.
As per the analysis from Bespoke Investment Group, a research firm, The Nasdaq has dropped more than 20 per cent in the last 30 trading days. According to the firm, a dip of that magnitude has only happened 11 times earlier, and nine of those declines were “related with recession.”
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Shares of many tech leaders such as Apple (AAPL), Microsoft (MSFT), Google owner Alphabet (GOOGL) and Tesla (TSLA) are all deeply in red. However, Netflix (NFLX) is the poorest performer in the S&P 500 in 2022, down more than 70 per cent, CNN Business reported.
The sharp drop is alarming Main Street, which is concerned that the US economy is losing its speed after a remarkable rebound from the pandemic-induced recession.
Investors are now waiting for capitulation, the point at which it appears that everyone has completely given up. When sentiment appears to be at its lowest, it may be time to begin buying them again.
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(With inputs from agencies)