Wall Street slumps as recession fears increasing

Wall Street slumps as recession fears increasing

The trend of bear market still continues

U.S stocks showed sharp negativity on Thursday and closed at very lower levels due to the huge sell-off. The reason for this sell-off is the fear that is disturbing to investors regarding the biggest rise in interest rates since 1994 by central banks and this fear is growing with the passage of time.  

Tom Hainlin, a global investment strategist at U.S Bank said that all over the world people are reevaluating today. They are re-evaluating what will be the possible recession limits and will corporate profits meet this or not.  

The Dow Jones Industrial Average closed at 29927.07 with a record low of 741.46 or 2.42%.

The S&P 500 fell 123.22 points or 3.25% and closed at 3,666.77 levels.

The Nasdaq showed 453.06 points negative which is equal to 4.08% and closed at 10,646.10 levels.

There are 11 major sectors in S&P 500 Index and all of them were negative on Thursday. While, defensive consumer staples was the only sector that was performing well because Walmart, General Mills, and, Procter and Gamble were top advancers.  

S&P’s growth stocks were badly hit on Thursday and went down by 3.75% while the Nasdaq Composite faced its 5th decline which is equal to 4% down since the start of May.

Analysts at Well Fargo see a greater than 50% chance of recession. There are other banks as well who warned about recessions are Deutsche and Morgan Stanley.

The benchmark index collapsed about 23% since the start of this year and it is confirmed recently that the bear market started on Jan 3. On the other hand, Dow Industrial was on the edge of confirming its own bear market.

The CBOE volatility index also known as Wall Street’s fear gauge, made a high and reached just below the 9-month high of 35.05 this week. There are many experts who are predicting VIX to reach the levels around 40 as selling pressure may come to its peak.

On Thursday volumes on the U.S exchanges were 1398 billion shares and over the past 20 days trading volume average is 12.16 billion.