The S&P 500 hit a new closing low for 2022 and the Dow Jones Industrial Average sank into a bear market, as interest rates soared and turmoil wreaked havoc in the global currencies markets.
The S&P 500 declined 1.03% to 3,655.04, falling below the June closing low of 3,666.77. It is down about 23% so far in 2022. The Dow dropped 329.60 points, or 1.11%, to 29,260.81 — spurring losses in the final moments of trading. The 30-stock index was down about 20.4% from its Jan. 4 closing high. The Nasdaq Composite dropped 0.6% to 10,802.92.
The British pound hit a record low on Monday against the U.S. dollar, plunging 4% at one point to an all-time low of $1.0382 after Britain’s new government announced plans to issue its biggest tax cut in 50 years and increase spending.
Bond yields surged on Monday, with the 10-year Treasury yield climbing to 3.9% at one point during the day., marking its highest level since 2010. The yield on the 2-year Treasury, which is especially sensitive to Fed policy, exceeded 4.3%, - the highest level since 2007.
That fueled more volatility in the markets stirring up the CBOE Volatility index VIX to near three-month highs (32.26), as investors are worried about a global recession amid decades-high inflation. investors are growing increasingly bearish on the stock market. American Association of Individual Investors (AAII) most recent investor sentiment survey revealed that only 17.7% of its respondents were bullish on the direction of stock prices over the next six months.