Stock futures fell on Thursday evening as investors prepared for the S&P 500, possibly sliding into official beer market territory.
The futures traded lower by 68 points, or 0.2%, on the Dow Jones Industrial Average. S&P 500 futures are down 0.2% and Nasdaq-100 futures are down 0.3%.
On Wednesday, the S&P 500 and Dow bounced low in their intraday but still fell 0.1% and 0.3%, respectively. S&P is down more than 18% from its all-time high, and if that loss is as deep as 20%, it will remain in an official beer market. The Dow has declined for six consecutive trading sessions.
The Nasdaq gained less than 0.1% on Wednesday, but the tech-heavy index is already in a bear market, well below its all-time high of 29%.
The stock market has been sinking for months, with high-growth late last year starting with non-profit technology stocks and in recent weeks with healthy cash flow stocks spreading to even firms. On Thursday, Apple fell into the market for a bear of its own, becoming the latest in the Big Tech name to surrender to the sell-off.
The fall wiped out much of the rapid gains of their downward-looking stocks in March 2020.
“Large deviations from long-term price trends have been used to identify bubbles. We see that US equities were in a bubble based on this metric, and are now coming out of it,” City strategist Dark Wheeler said in a note to clients on Thursday.
One reason stocks have struggled in recent months has been high inflation, and the Federal Reserve’s efforts to contain prices by raising rates. Fed Chair Jerome Powell told NPR on Thursday that he could not guarantee a “soft landing” that would reduce inflation without causing a recession.
Although stocks enjoyed a two-week rally after the Fed’s first rate hike in March, those gains were quickly erased by a brutal April and sales continued into May. The Treasury market this week has some signs of investor sentiment surveys and some signs that the market may be close, but many investors and strategists say the market needs to take a bigger step.
Andrew Smith, chief investment strategist at Deloitte Capital, said: “You’re getting this market that’s really begging for a relief rally downstairs. But, at the end of the day, it wasn’t really a surrender day.”
The rise of cryptocurrencies has also made Wall Street uneasy this week, with Bitcoin falling below $ 30,000 and Stablecoin struggling to hold their pegs.
On the economic data front, a reading on the April import price on Friday and May shows the initial appearance of consumer confidence.