Markets closed out their worst quarter since the pandemic broke out two years ago, as selling left stocks hit Wall Street on Thursday.
Despite posting gains of 3.6% for March, disappointing January and February left the US index lower for the year. The S&P 500 ended the day down 1.6%, reducing its loss from the beginning of the year to 4.9%.
The Dow Jones Industrial Average fell 1.6%, while the Nasdaq Composite fell 1.5%. Both indices also posted gains for March, thanks to the market’s rally in two weeks this week.
Oil prices fell as President Joe Biden ordered a release of up to 1 million barrels of oil per day from the country’s strategic petroleum reserves, The move to pump more oil into the market is part of an effort to control energy prices, which are up about 40% globally this year.
Wall Street’s downbeat finish in March comes as investors try to navigate market risks amid rising inflation, geopolitical volatility and uncertainty about how aggressively the Federal Reserve will raise interest rates to stave off inflation.
“Yesterday’s weakness and some weakness may be in response to today’s sentiment, which is a bit more cautious given the recent strength over the past two weeks and uncertainty related to inflation and earnings,” said Terry Sandven, chief equity strategist at US Bank Wealth Management. Is.” ,
The S&P 500 fell 72.04 points to end at 4,530.41. The Dow fell 550.46 points to 34,678.35 and the Nasdaq fell 221.76 points to 14,220.52.
Shares of smaller companies also fell. The Russell 2000 Index fell 20.94 points, or 1%, to 2,070.13.
Nearly 85 percent of the benchmark S&P 500 shares fell. Scott Wren, senior global market strategist at Wells Fargo Investment Institute, said most of the movement looked like “consolidation” to investors.
“It’s a little bit back from the big run we had today, but we’re hanging out here pretty well,” Wren said. Major indices fell on Wednesday to end the winning streak for four days.
Technology and communications were among the biggest weight gainers on the stock market. Many companies in those sectors have valuable stock prices that give the broader market a more forceful push up or down. Chipmaker Intel fell 3.6%, while Facebook’s parent meta platform fell 2.4%.
Bond yields fell as well as banks, which lowers interest rates on loans, making lending less profitable for banks. The yield on the 10-year Treasury fell to 2.34% from 2.36% late Wednesday. Bank of America dropped 4.1%.
US crude oil prices fell 7% and the international benchmark Brent fell 4.9%. Pullback trimmed slightly as oil prices rise amid Russia’s invasion of Ukraine, The conflict has heightened concerns that tight supply will only worsen the ever-increasing inflation that threatens businesses and consumers globally.
Inflation gauge closely monitored by the Federal Reserve jumped 6.4% in February Compared to a year earlier, January marks the largest year-on-year increase since 1982.
Energy prices have been a key factor driving inflation higher and Biden’s plan to release more oil into the system is expected to see little relief from the oil cartel OPEC. Cartel and its affiliated oil producers, including Russia, maintain modest growth in the amount of crude they pump the world, a move that favors higher prices.
High prices for everything from energy to food have been a major concern of central banks globally, which are moving to raise interest rates to help cushion the impact. Investors are trying to gauge how the economy and companies will perform among other factors, including rising inflation, high interest rates, the war in Ukraine, and more. It has started the year well.
Investors got a light update on the job market on Thursday. More Americans applied for unemployment benefits last week, but layoffs remain at historic lows. Wall Street will get the full report on Friday when the Labor Department releases employment data for March.