Equity futures fell on Thursday night as investors prepared for the S&P 500 to enter the official bear market.
Dow Jones Industrial Average futures fell 68 points, or 0.2%. S&P 500 futures lost 0.2% and Nasdaq-100 futures fell 0.3%.
On Wednesday, the S&P 500 and Dow rebounded from their intraday lows, but still fell 0.1% and 0.3%, respectively. S&P has closed more than 18% of its highest level ever and will be in the official bear market if this loss deepens to 20%. The Dow fell for six consecutive trading sessions.
Nasdaq reported a gain of less than 0.1% on Wednesday, but the technology index is already in a bear market, falling more than 29% from its highest level of all time.
The stock market has been collapsing for months, starting with high growth in unprofitable technology stocks at the end of last year and spreading even to companies with stable cash flow shares in recent weeks. On Thursday, Apple fell into its own bear market, becoming the last of the big technology names to go on sale.
The decline wiped out much of the rapid gains that stocks enjoyed from its pandemic lows in March 2020.
“Large deviations from long-term price trends have been used to identify a bubble. We find that US stocks have been in a bubble based on this indicator and are now coming out of it,” Citi strategist Dirk Wheeler said in a note to customers on Thursday.
One of the reasons stocks have been struggling in recent months is high inflation and the Federal Reserve’s attempts to keep prices down by raising interest rates. Fed Chairman Jerome Powell told the NPR on Thursday that he could not guarantee a “soft landing” that would reduce inflation without causing a recession.
Although the shares enjoyed a two-week rise after the Fed’s first rate hike in March, those gains were quickly erased by brutal April and sales continued in May. There are some signs, such as investor sentiment surveys and some stabilization in the public finance market this week, that the market may be close, but many investors and strategists say the market may need to take another significant step down.
“You get this market that really begs for the bottom, for relief. But at the end of the day, there really wasn’t a day of capitulation,” said Andrew Smith, chief investment strategist at Delos Capital Advisors.
The development of cryptocurrencies also worried Wall Street this week, with bitcoin falling well below $ 30,000 and stablecoins struggling to maintain their commitment.
In terms of economic data, Friday includes a reading of import prices in April and an early look at consumer confidence in May.
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