Stocks fell again on Wall Street Friday, capping off the worst weekly drop for the S&P 500 since the start of the pandemic.
Investors have grown increasingly worried about rising inflation and how aggressive the Federal Reserve might be in raising interest rates to tamp it down. Historically low rates helped support the broader market as the economy absorbed a sharp hit from the pandemic in 2020 and then recovered over the last two years.
The tech-heavy Nasdaq fell 385.10, or 2.7 percent, to 13,768.92. With investors expecting the Fed to begin raising rates as soon as its March policy meeting, shares in pricey tech companies and other expensive growth stocks have looked relatively less attractive. The index has fallen for four straight weeks and is now more than 10 percent below its most recent high, putting it in what Wall Street considers a market correction. The Nasdaq is down 14.3% from the record high set on Nov. 19.
Treasury yields fell sharply as investors turned toward safer investments. The yield on the 10-year Treasury fell to 1.76 percent from 1.83 percent late Thursday. The drop weighed on bank stocks, which rely on higher yields to charge more lucrative interest on loans. Wells Fargo fell 2.4 percent and Bank of New York Mellon dropped 4.6 percent.
Rising costs have raised concerns that consumers will start to ease spending because of the persistent pressure on their wallets. The government’s retail sales data for December showed an unexpected decline in spending. Investors will be watching the closely when Fed officials meet for their latest policy meeting next week. Some economists are concerned the central bank has been to slow to act to fight inflation. Consumer prices rose 7% in December compared to a year earlier, the biggest increase in nearly four decades.
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