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The New York Stock Exchange closed Monday's session with resounding and widespread falls, which placed several of the benchmark indices in bear markets or, as it is called in the US, 'bear market' ('bear market') . The S&P 500 index closed with a drop of 3,9% and hanging for some moments of the session had almost all its values in the red, a very unusual circumstance. The Dow Jones index, which groups 30 of the main listed companies, fell 2,8%, while the Nasdaq, the reference index for technology companies, fell 4,7%.
The markets had the weekend to digest the worrying inflation data that was known on Friday -prices grew by 8.6% in May, the highest rate in forty years, without showing signs of letting up- and they started the week with concern about the measures that the Federal Reserve is going to be forced to take this year.
The monetary authority has already approved two rate hikes so far this year to put an end to the uncovered evolution of prices. It did so at its meetings in March - the first time it had raised rates since the end of 2018 - and in May, when it did so by half a point, the largest increase since 2000.
The Fed will continue to support its monetary policy – this week there is another meeting and another half-point hike is expected – and that fuels fears that they will lead the US economy into recession.
The bear market is one in which the indicator in question is below 20% of its historical peak. It happened in Monday's session with the S&P 500, which touched its maximum on January 3, and had already happened with the Nasdaq, which is 32% from its maximum in November of last year. In this case, the Dow Jones is not considered a bear market yet, but it is on its way: its level is 16% lower than the peak it reached on December 31 of last year.
The stock market crash left hardly anyone unscathed. Among the main losers were also several technology companies, a sector that disappeared during the pandemic: Apple fell 3,8%, better than Amazon did it by 5,5%, Meta (the parent company of Facebook) fell 6,4% and Tesla, the electric car giant led by Elon Musk, sank 7,1%.
Including the energy sector, the one-ounce sector that makes up the S&P 500 that is green where it has gone this year, fell with a crash: 5,1%.
The collapse came with a pronouncement in the fall of cryptocurrencies: the most important, Bitcoin, accumulated at the end of the session a drop in the last 24 hours of about 15%, according to CoinDesk, and Ethereum registered a similar collapse. Since its peak last November, Bitcoin's dollar exchange rate has fallen by more than 65%.
