Dow Jones drops more than 1,000 points

Stocks continued their week-long cascade on Monday after the S&P 500 experienced its worst week since the start of the pandemic.

The latest roadmap comes as investors anxiously await more corporate earnings results and key policy decisions from the Federal Reserve.

The Dow Jones Industrial Average lost about 1,070 points, or 3.1%, for a seventh straight day. The S&P 500 fell 3.9%. The benchmark is down more than 10% from its intraday high. Nasdaq Composite fell 4.7%, falling deeper into correction.

Second action market following a brutal week on Wall Street in the face of mixed corporate earnings and worries about rising interest rates.

Monday’s drop has sent the S&P 500 down more than 11% this month, in line with its worst monthly decline since March 2020 and its worst January performance ever. The Dow also posted its biggest one-month loss since March 2020, down more than 7%. Nasdaq, meanwhile, fell about 15% in January and is on track for its worst month since October 2008 – when it fell 17.7%.

Nasdaq is on track for its worst month since October 2008, when it fell 17.7%.

The CBOE Volatility Index (VIX), known on Wall Street as the market’s “fear gauge,” hit its highest level since November 2020, reaching 38.47.

The sharp drop has also rattled retail investors, who flocked to the market in the early days of the pandemic and hit record highs through 2021.

Q4 earnings season has been a mixed month. While three-quarters of the S&P 500 companies that reported results topped Wall Street estimates, several key companies disappointed investors last week, including Goldman Sachs and Netflix.

“What was originally a drop in the withdrawal stimulus morphed last week to include arbitrage earnings,” Adam Crisafulli, founder of Vital Knowledge, said in a note. “So investors are now worried not only about multiples set on earnings, but self-forecast EPS (earnings per share).”

Investors are anticipating a flurry of high-equity earnings reports from major tech companies this week. Microsoft is down 5%, Apple is down 3.4% and Tesla is down 7.5% from the quarterly report.

Shares of Peloton rebounded more than 4% on news that activist investor Blackwells is calling on the interactive fitness company to fire CEO John Foley and look for a buyer.

Riskier assets are selling off this year as investors prepare for the Fed to tighten monetary policy. Bitcoin down more than 8 percent over the weekend, wiped out almost half of its value at the record high hit in November. The price fell another 4% Monday morning to just under $34,000.

Investors are eyeing the Fed’s policy meeting, which ends on Wednesday. Market participants will be looking for any signals on how much the central bank will raise interest rates this year and when.

The Federal Open Market Committee, which sets interest rates, responded with expectations that it would be inactive at this meeting but would deliver the first of many rate hikes starting in March. Additionally, the Fed is expected to end its monthly asset purchases program that same month.

At his post-meeting news conference, Federal Reserve Chairman Jerome Powell could also signal when the central bank will begin easing its massive balance sheet.

Goldman Sachs said over the weekend that it sees an increased risk that the Fed could enact even more than the four-quarter percentage point hikes the market has priced in this year. The company also said the Fed will likely begin withdrawing the nearly $9 trillion in assets it holds in July.

Bond yields have surged in the new year in anticipation of a rate hike by the Fed, which in part caused a dramatic sell-off in growth-driven tech stocks. While the yield on the 10-year Treasury note ended last week was about 1.76% lower, the benchmark yield has risen about a quarter of a percentage point in 2022.

David Lefkowitz, head of Americas equities at UBS Global Wealth Management. Dow Jones drops more than 1,000 points

Jake Nichol

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