US yields slide for third day as growth worries persist

NEW YORK, May 20 (Reuters) – US Treasury yields fell for a third straight session on Friday, as investors remained concerned about growing signs of an economic slowdown even as the Federal Reserve vowed to stay aggressive with monetary tightening to stamp out persistently high inflation.

“Concerns over slowing growth are taking hold with more analysts warning of not just stagflation, but recession,” said Kim Rupert, managing director, fixed income at Action Economics in San Francisco.

“The hits to margins that have been seen in Target, Walmart, and the like, due to rising costs of labor, materials, energy, and transportation are seen as potential harbingers of the worrisome future ahead,” she added.

Fed funds futures were firmer, suggesting that the US rate market has pulled back a bit from some of its more extreme rate hike estimates on the view that the Federal Reserve may have to scale back on its tightening plan, involving multiple 50 basis-point increases, as the economy slows down.

The rates market on Friday had priced in a fed funds rate of 2.783% at the end of next year, compared with the current level of 0.83%. That was as high as 2.9% two weeks ago.

BofA Securities, in its latest research note, said there had been a “market sea change in rate views” over the last two weeks. It reaffirmed its call last month of going long duration when the 10-year yield was between 2.8%-2.85%.

The US bank cited several factors such as yields having overshot fundamentals, Fed pricing looking full, growth and inflation easing and signs of an economic slowdown in surveys.

In mid-morning trading, the benchmark US 10-year yield slipped 2.2 basis points to 2.833%.

The 30-year yield fell as well, dipping 2.4 bps to 3.041%.

On the front end of the curve, US two-year yields were little changed at 2.613%.

The yield curve flattened again on Friday, with the spread between US two- and 10-year yields narrowing to 21.2 bps. It has flattened in the four of the last five sessions.

“The curve flattening dynamic should persist until the Fed pivots dovish driven by early signs of softening employment & a higher unemployment rate,” BoFA wrote in its note.

May 20 Friday 10:26 AM New York/1426 GMT

	Price	Current Yield %	Net Change (bps)
Three-month bills	1.03	1.0469	0.000
Six-month bills	1.465	1.4962	-0.006
Two-year note	99-201/256	2.6139	0.003
Three-year note	99-242/256	2.7691	-0.008
Five-year note	99-156/256	2.8351	-0.014
Seven-year note	100-32/256	2.8548	-0.022
10-year note	100-104/256	2.8279	-0.027
20-year bond	100-100/256	3.2232	-0.029
30-year bond	96-196/256	3.0402	-0.025
DOLLAR SWAP SPREADS
	Last (bps)	Net Change (bps)
US 2-year dollar swap spread	27.75	-1.75
US 3-year dollar swap spread	12.75	-1.50
US 5-year dollar swap spread	3.00	-0.25
US 10-year dollar swap spread	6.00	-0.25
US 30-year dollar swap spread	-27.00	-0.50

(Reporting by Gertrude Chavez-Dreyfuss; Editing by Alison Williams)

Wall Street rises as growth stocks gain after two days of selloff

May 20 (Reuters) – U.S. stock indexes rose on Friday led by megacap growth and healthcare shares at the end of a volatile week, roiled by concerns over the impact of rising inflation on earnings and the fallout of rate hikes on economic growth.

Nine of the 11 major S&P sectors advanced in morning trade. Energy was the top performer, up 2.2%, followed by healthcare and technology sectors.

Microsoft Corp MSFT.O, Amazon.com (AMZN) and Apple Inc. (AAPL), rose between 1.5% and 1.8%, providing the biggest boost to the S&P 500 and the Nasdaq.

“Some traders are taking advantage of the price weakness, at least in the short term, to make some money. The real question is whether this will last by the end of the day,” Sam Stovall, chief investment strategist at CFRA Research, said.

“It is definitely going to be a traders’ battle today. The market is trying to orchestrate at least a near-term relief rally, which is normal within bear market trends.”

Disappointing forecasts from big retailers Walmart Inc. (WMT) and Target Inc. (TGT) rattled market sentiment this week, adding to evidence that rising prices have started to hurt the purchasing power of U.S. consumers.

The S&P 500 and the Nasdaq are set for their seventh straight week of losses, their longest losing streak since the end of dotcom bubble. The Dow is on track for its eighth consecutive weekly decline, its longest since 1932, during the Great Depression.

The indexes are down between 13.3% and 26.1% so far this year as investors adjust to supply-chain snarls, lockdowns in China, geopolitical uncertainty stemming from the Ukraine conflict and the U.S. Federal Reserve raising rates.

Traders are pricing in 50-basis point rate hikes by the US central bank in June and July.

The benchmark index is down about 18.1% from its record close on Jan. 3. A close of 20% or more below that level will confirm the S&P 500 has been in a bear market since hitting the peak.

At 10:01 a.m. ET, the Dow Jones Industrial Average was up 189.32 points, or 0.61%, at 31,442.45, the S&P 500 was up 34.31 points, or 0.88%, at 3,935.10, and the Nasdaq Composite was up 117.90 points, or 1.04%, at 11,506.40.

Asian and European shares rebounded on Friday after China cut a key lending benchmark to support its economy.

Among other stocks, Ross Stores (ROST) plunged 23.3% after the discount apparel retailer cut its 2022 forecasts for sales and profit, while Vans brand owner VF Corp. (VFC) gained 4.5% on strong 2023 revenue outlook.

Deere & Co. (DE) slid 10% after the heavy equipment maker posted downbeat quarterly revenue.

Match Group Inc. (MTCH) climbed 4.6% to the top of S&P 500 index as Alphabet Inc.’s (GOOGL)_ Google would allow the dating apps maker to offer users a choice in payment systems.

Advancing issues outnumbered decliners by a 2.28-to-1 ratio on the NYSE and by a 2.03-to-1 ratio on the Nasdaq.

The S&P index recorded one new 52-week high and 36 new lows, while the Nasdaq recorded 11 new highs and 143 new lows.

(Reporting by Amruta Khandekar and Devik Jain in Bengaluru; Editing by Shounak Dasgupta and Arun Koyyur)

Oil settles up as supply risks outweigh economic worries

NEW YORK, May 20 (Reuters) – Oil prices settled slightly higher on Friday as a planned European Union ban on Russian oil and easing of COVID-19 lockdowns in China countered concerns that slowing economic growth will hurt demand.

Brent LCOc1 futures for July delivery rose 51 cents, or 0.5%, to USD 112.55 a barrel. US West Texas Intermediate (WTI) crude for June rose USD 1.02, or 0.9%, to settle at USD 113.23 on its on its last day as the front-month.

WTI notched its fourth straight week of gains, which it last did in mid-February. Brent gained about 1% this week after falling about 1% last week.

The more actively-traded WTI contract for July was up about 0.4% to USD 110.28 a barrel.

“The risks remain tilted to the upside … given the Chinese reopening and continued efforts towards a Russian oil embargo by the EU,” said Craig Erlam, a senior market analyst at OANDA.

In China, Shanghai did not signal any change to its planned end of a prolonged city-wide lockdown on June 1 even though the city announced its first new COVID-19 cases outside quarantined areas in five days.

The energy market expects the lifting of some coronavirus restrictions in Shanghai to boost energy demand. China is the world’s top crude importer.

The EU is hoping to clinch a deal on a proposed ban of Russian crude imports which includes carve-outs for member states most dependent on Russian oil, such as Hungary.

“Odds of an EU embargo being declared sooner rather than later increased in the wake of Germany’s success in cutting Russian oil imports by more than half in a very short period,” consultancy BCA research said in a note.

German big business is drafting a plan to use an auction system to help ration available supplies in the event Russia cuts off its gas, although some fear it could punish smaller firms.

In the United States, US energy firms this week added oil and natural gas rigs for a ninth week in a row, according to the Baker Hughes rig count, as mostly small producers respond to high prices and prodding by the government to ramp up output.

The rig count is an indicator of future output growth.

Americans continued to get behind the wheel even though gasoline prices at the pump keep hitting record highs. Auto club AAA said national average regular unleaded gasoline prices hit a record USD 4.59 per gallon on Friday.

In India, crude oil imports in April were the highest in 3-1/2 years as the world’s third biggest oil importer and consumer ramped up discounted Russian oil purchases to fuel demand recovery and fight high prices.

In Norway, crude output in April missed official forecast by 10.6%, while its gas production was in line with expectations.

(By Scott DiSavino; Additional reporting by Noah Browning in London and Sonali Paul in Melbourne; Editing by Marguerita Choy, Susan Fenton and David Gregorio)

Philippines central bank sees reform continuity, solid growth this year

MANILA, May 20 (Reuters) – The Philippine central bank chief said on Friday president-elect Ferdinand Marcos Jr. is better placed than his predecessor to face economic challenges and that he expects structural reforms and infrastructure build-up will continue under the new administration.

Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno, speaking at an Asian Development Bank Institute forum, said there are clear indications that key reforms will continue under Marcos, who takes office next month and will command a supermajority in Congress.

A smooth transition of power, and the newly-elected leader’s “overwhelming mandate” should help sustain economic growth and investor confidence, he said.

“They have also indicated that they are going to continue what’s being done by the current administration, which is strong on public infrastructure,” Diokno said, referring to Marcos and his political allies that include Vice President-elect Sara Duterte-Carpio, the incumbent leader’s daughter.

Diokno also said the next administration will inherit “a better state of infrastructure” and a “more robust economy”, putting this year’s growth on track to hit the 7%-9% target.

But like the rest of the world, he said the Philippines faces risks to its growth outlook, such as a deterioration in the COVID-19 situation and a prolonged Russia-Ukraine conflict.

The BSP has taken measures to sustain the growth momentum by addressing rising inflationary pressures, with a 25 basis points increase in interest rates effective Friday, its first hike since 2018.

Diokno said the BSP’s policy tightening cycle has begun, adding that its “exit strategy” after undertaking “extraordinary” measures to support the pandemic-hit economy will be rolled out in a gradual manner.

The BSP’s policy actions will be “well-communicated” and guided by the inflation and growth outlook over the medium term as well as the public health situation, he said.

(Reporting by Karen Lema and Enrico Dela Cruz; Editing by Ed Davies and Kanupriya Kapoor)

‘Retail apocalypse’: Wall Street shaken by inflation-induced earnings hits

NEW YORK, May 19 (Reuters) – Walmart, Target and Kohl’s were among major retailers that reported earnings this week that missed Wall Street expectations by the widest margin in at least five years, underscoring the wallop four-decade-high inflation is bringing to US shoppers’ wallets and retailers’ bottom lines.

Among 145 retailers that have reported first-quarter earnings so far, 127 mentioned inflation and 138 flagged supply chain issues, according to Refinitiv data.

Higher staffing costs, bloated inventories and more expensive fuel took a toll on retailer profits, contributing to a market rout that saw Wall Street post its worst day since mid-2020 on Wednesday.

Department store chain Kohl’s Corp. (KSS) on Thursday became the latest to cite soaring inflation in posting a 92% decline in adjusted profit.

Chief Executive Michelle Gass blamed higher freight and wage costs and lower clothing demand for adjusted earnings of 11 cents per share that was 59 cents short of analysts’ estimates, a gap of nearly 85%.

Walmart Inc. (WMT), the nation’s largest retailer, posted a quarterly profit that fell 25%, marking its first miss in five quarters. The gap of 12.3% between Wall Street’s expectations and Walmart’s earnings per share figure was its widest since at least 2017.

For rival Target Corp. (TGT), which saw its profits halve, that margin between expectation and reality was 29%, which was also its biggest in at least five years, according to Refinitiv.

“This is a little bit of a retail apocalypse. It was Walmart (on Tuesday) and everybody thought it was a one-off,” said Dennis Dick, a trader at Las Vegas-based Bright Trading LLC.

“Now that Target missed earnings (by) a lot more than Walmart even did, they’re scared that the consumer is not as strong as everybody thinks.”

While Wall Street brokerages were expecting profits to be pressured by soaring fuel costs, analysts said they were caught off guard by the rapid retrenchment among consumers and shifts toward buying lower-margin basics instead of more profitable general merchandise.

The extent of inventory buildup and heavy discounting by retailers was also a bit of a shock, they said.

“The biggest surprise was the inventory markdowns and rollbacks (in prices). I don’t think any analyst was expecting that,” CFRA analyst Arun Sundaram told Reuters.

AJ Bell Investment Director Russ Mould called the inventory figures “startling.”

Target’s inventories were up 43% in the first quarter, as unsold televisions and bulky kitchen appliances piled up, while Walmart’s rose 32% in the quarter.

In some ways, the retailers are victims of their own success after figuring out how to keep stores relatively well stocked in the midst of supply snarls, truck driver shortages and on-and-off lockdowns intended to curb the spread of COVID-19.

Sundaram said Target’s wider earnings miss was due partly to a greater emphasis on general merchandise sales compared to Walmart, which focuses more on selling groceries and other essentials.

Wall Street is also “angry” about the lack of warning from Walmart and Target, which gave upbeat outlooks for 2022 a little over two months ago, said Jane Hali, CEO of investment research firm Jane Hali & Associates.

The financial impacts of the war in Ukraine and prolonged COVID lockdowns in China likely played a part in the stark turnaround in companies’ predictions for the year, she added.

“Wall Street is panicked,” Hali said. “Target had an investment day not too long ago, where they made no mention of the issues they highlighted on Wednesday. So I can understand the Street being angry about that.”

(Additional reporting by Devik Jain in Bengaluru; Editing by Bill Berkrot)

S&P 500, Dow slip as Cisco drags, Nasdaq steady after selloff

May 19 (Reuters) – The S&P 500 and the Dow extended losses on Thursday as Cisco Systems slumped after it gave a dismal outlook, while investors fretted over the impact of surging inflation on economic growth and corporate earnings.

Shares of the networking gear maker Cisco Systems Inc. (CSCO) slumped 12.7% as it lowered 2022 revenue growth outlook, taking a hit from Russia exit as well as component shortage due to China lockdowns.

Kohl’s Corp. (KSS) slipped 1.1% after the department store chain cut its full-year profit forecast, the latest US retailer to flag a hit from four-decades high inflation.

The S&P consumer staples index .SPLRCS fell 1.9% to hit a seven-month low and was the biggest decliner among the 11 major sectors as retail firms face the brunt of rising prices hurting the purchasing power of US consumers.

“The consumer component is now starting to weaken, which bolsters the perspective that we are indeed heading into a recession,” said Randy Frederick, managing director of trading and derivatives for Charles Schwab in Austin, Texas.

Consumer spending accounts for more than two-thirds of US economic activity.

In the previous session, the S&P 500 and the Nasdaq closed down more than 4% as growth stocks sank and retailer Target Corp. (TGT) posted weak results.

The benchmark index is down 18.6% from its record close on Jan. 3 and a close below 20% will confirm bear market territory, joining its tech-heavy peer Nasdaq.

Rate-sensitive growth have led the selloff this year as investors adjust to tightening financial conditions with the US Federal Reserve raising rates.

“The central worry facing investors right now is how the Federal Reserve will or will not be able to tame inflation without causing a recession,” Ryan Belanger, managing principal and founder of Claro Advisors said in a note.

“Investors should become accustomed to significant downside and upside moves in stocks, which is common during times of tremendous uncertainty.”

Goldman Sachs strategists predicted a 35% chance of the US economy entering a recession in the next two years, while Wells Fargo Investment Institute expects a mild US recession at the end of 2022 and early 2023.

The Labor Department’s report showed weekly jobless claims unexpectedly rose last week, while a separate data from the Philadelphia Fed showed its business conditions index dropped to a reading of 2.6 in May from 17.6 in April.

At 10:08 a.m. ET, the Dow Jones Industrial Average .DJI fell 0.89% to 31,211.38 and the S&P 500 dropped 0.42% to 3,907.16.

The battered Nasdaq Composite, however, edged 0.26% higher to 11,447.30, boosted by megacap tech and growth shares such as Alphabet Inc. (GOOGL), Microsoft Corp. (MSFT) and Amazon.com (AMZN).

The CBOE volatility index, also known as Wall Street’s fear gauge, rose to 31.57 points, its highest since May 12.

Canada Goose Holdings Inc. (GOOS) jumped 5.3% after it forecast upbeat annual earnings, encouraged by strong demand for its luxury parkas and jackets.

Declining issues outnumbered advancers for a 1.23-to-1 ratio on the NYSE. Advancing issues outnumbered decliners by a 1.08-to-1 ratio on the Nasdaq.

The S&P index recorded one new 52-week high and 42 new lows, while the Nasdaq recorded four new highs and 257 new lows.

(Reporting by Devik Jain and Amruta Khandekar in Bengaluru; Editing by Shounak Dasgupta, Sriraj Kalluvila and Arun Koyyur)

Philippines kicks off tightening cycle with first rate hike since 2018

MANILA, May 19 (Reuters) – The Philippine central bank raised interest rates for the first time since 2018 on Thursday, joining peers around world in a rush to stem intensifying inflationary pressures that could derail the domestic economy’s recovery.

The central bank also said the strong rebound in domestic economic activity and labour market conditions during the first quarter “provides scope for (the central bank) to continue rolling back its pandemic-induced interventions”, signaling further tightening could be expected.

The Bangko Sentral ng Pilipinas (BSP) lifted the overnight reverse repurchase facility rate by 25 basis points to 2.25%, as expected by the majority of 17 economists in a May 12-16 Reuters poll.

The rates on the overnight deposit and lending facilities were likewise raised by 25 bps to 1.75% and 2.75%, respectively.

The BSP slashed interest rates by a cumulative 200 basis points in 2020 to help revive an economy that had plunged into recession due to the COVID-19 pandemic.

“Persistent inflationary pressures point to the need for prompt monetary action to anchor inflation expectations,” BSP Governor Benjamin Diokno said.

The BSP revised its 2022 average inflation forecast to 4.6%, from 4.3% previously, above the 2%-4% target band. For 2023, inflation is seen closer to the upper end of the same target range at 3.9%.

Diokno also noted the emergence of additional factors that could push inflation higher, such as the higher-than-expected adjustment in minimum wages in some regions, including in metropolitan Manila, which will take effect next month.

Given ample liquidity, a gradual recovery in credit activity, and stable financial market conditions, Diokno said the BSP also decided to “reconfigure” its government securities (GS) purchasing window “from a crisis intervention measure into a regular liquidity facility under our interest rate corridor framework”.

“The recalibrated GS purchasing window shall enhance the BSP’s ability to manage domestic liquidity conditions and ensure the sustainability of its balance sheet,” he said.

(Reporting by Neil Jerome Morales, Karen Lema and Enrico Dela Cruz; Editing by Kanupriya Kapoor and and Tom Hogue)

Oil rebounds from two days of losses in volatile trade

NEW YORK, May 19 (Reuters) – Oil prices rebounded from two days of losses in a volatile session on Thursday, bolstered by weakness in the dollar and expectations that China could ease some lockdown restrictions that could boost demand.

Crude benchmarks continued their spate of wild swings, with both Brent and US crude rising by nearly USD 5 a barrel in the span of a few hours, recovering from losses earlier in the week.

“The market has been extremely volatile,” said Andrew Lipow, president of Lipow Oil Associates in Houston. “The market is reacting to all sorts of different headlines hour to hour, and the movement in oil markets on a day-by-day basis getting even more exaggerated.”

Brent crude futures for July settled at USD 112.04, a gain of USD 2.93 a barrel, or 2.7%. US West Texas Intermediate (WTI) crude futures for June settled up USD 2.62, or 2.4%, to USD 112.21 a barrel.

In China, investors are closely watching plans to ease coronavirus curbs from June 1 in the most populous city of Shanghai, which could lead to a rebound in oil demand from the world’s top crude importer.

Oil markets also rebounded as the dollar weakened. The broad dollar index was down 1% on the day after recent gains. Oil benchmarks often move inversely to the dollar as most global crude transactions are handled in dollars, so a rising greenback makes crude more expensive for big importers.

Crude gains have been limited, however, with the Brent and US benchmarks trading in a range due to the uncertain path of demand. Investors, worried about rising inflation and more aggressive action from central banks, have been reducing exposure to riskier assets.

“Brent seems pinned above USD 100 but I think the recession risk and all of the concerns about Chinese demand are limiting the upside and will continue to do that,” said Bill Farren-Price, head of oil and gas macro research at Enverus in London.

The looming possibility of a European Union ban on Russian oil imports has been supporting prices. This month the EU proposed a new package of sanctions against Russia over its invasion of Ukraine, which Moscow calls a “special military operation.”

That would include a total ban on oil imports in six months’ time, but the measures have not yet been adopted, with Hungary among the most vocal critics of the plan.

(Additional reporting by Yuka Obayashi in Tokyo and Florence Tan in Singapore; Editing by Marguerita Choy, Mark Potter and Nick Zieminski)

Fed policymakers map out shift to ‘measured’ hikes

May 18 (Reuters) – Two US central bankers say they expect the Federal Reserve to downshift to a more measured pace of policy tightening after July as it seeks to quell inflation without lifting borrowing costs so high that they send the economy into recession.

It’s not clear if that view – mapped out on Tuesday by Chicago Federal Reserve Bank President Charles Evans and on Wednesday by Philadelphia Fed chief Patrick Harker – marks a consensus at the Fed for how to bring down the highest inflation in 40 years.

But it does suggest that while policymakers broadly back using half-point rate hikes to get short-term borrowing costs to a range of 1.75%-2% over the next two months, support for sticking to that pace beyond July may be limited.

Evans on Tuesday told an audience in New York City that he expects to transition to “measured” rate hikes after an initial burst of policy tightening. In the Fed lexicon, “measured” means quarter-point rate hikes.

On Wednesday Harker gave a similar assessment, telling the Mid-Size Bank Coalition of America that after July, “I anticipate a sequence of increases in the funds rate at a measured pace until we are confident that inflation is moving toward the Committee’s inflation target.”

As he spoke, the S&P 500 and the Dow Jones Industrial Average were tumbling and ended with the sharpest one-day loss in nearly two years.

“I still am in the camp that we can have, if not a soft landing, a safe landing,” Harker said, noting the strength of the labor market, with nearly two jobs open for every American jobseeker, and an unemployment rate of 3.6%.

The US economy will likely grow between 2% and 3% this year, he said, adding, “this economy can withstand a measured, methodical approach to tightening financial conditions.”

Fed policymakers say the current bout of high inflation — running at more than three times the Fed’s 2% target — is the product of outsized demand bumping up against constrained supply.

Fed Chair Jerome Powell has not been specific about his expectations for the policy path beyond July. On Tuesday he said the Fed will keep pushing on rate hikes until it sees clear and convincing evidence that inflation is cooling.

(Writing by Ann Saphir; Editing by Cynthia Osterman)

Wall Street ends sharply lower as Target and growth stocks sink

May 18 (Reuters) – Wall Street ended sharply lower on Wednesday, with Target losing around a quarter of its stock market value and highlighting worries about the US economy after the retailer became the latest victim of surging prices.

It was the worst one-day loss for the S&P 500 and Dow Jones Industrial Average since June 2020.

Target Corp’s (TGT) first-quarter profit fell by half and the company warned of a bigger margin hit on rising fuel and freight costs. Its shares fell about 25%, losing about USD 25 billion in market capitalization, in their worst session since the Black Monday crash on Oct. 19, 1987.

The retailer’s results come a day after rival Walmart Inc. (WMT) trimmed its profit forecast. The SPDR S&P Retail ETF (XRT) dropped 8.3%.

“We think the developing impact on retail spending as inflation outpaces wages for even longer than people might have expected is a principal factor in causing the market sell-off today,” said Paul Christopher, head of global market strategy at Wells Fargo Investment Institute. “Retailers are starting to reveal the impact of eroding consumer purchasing power.”

Interest-rate sensitive megacap growth stocks added to recent declines and pulled the S&P 500 and Nasdaq lower. Amazon (AMZN), Nvidia (NVDA) and Tesla Inc. (TSLA) dropped close to 7%, while Apple (AAPL) fell 5.6%.

“The cons outweigh the pros for growth stocks at this particular moment, and the market is trying to decide how bad it’s going to get,” said Liz Young, head of investment strategy at SoFi. “The market is fearful of the next six months. We may find out that it doesn’t need to be as fearful as this, and markets do tend to overreact on the downside.”

All of the 11 S&P 500 sector indexes declined, with consumer discretionary and consumer staples leading the way lower, both down more than 6%.

Rising inflation, the conflict in Ukraine, prolonged supply chain snarls, pandemic-related lockdowns in China and monetary policy tightening by central banks have weighed on financial markets recently, stoking concerns about a global economic slowdown.

Wells Fargo Investment Institute on Wednesday said it expects a mild US recession at the end of 2022 and early 2023.

Federal Reserve Chair Jerome Powell vowed on Tuesday that the US central bank will raise rates as high as needed to kill a surge in inflation that he said threatened the foundation of the economy.

Traders are pricing in 50-basis point interest rate hikes by the Fed in June and July.

Unofficially, the S&P 500 declined 4.04% to end the session at 3,923.68 points.

The Nasdaq declined 4.73% to 11,418.15 points, while Dow Jones Industrial Average declined 3.57% to 31,490.07 points. The S&P 500 is down about 18% so far in 2022 and the Nasdaq has fallen about 27%, hit by tumbling growth stocks. Almost two-thirds of S&P 500 stocks are down 20% or more from their 52-week highs, according to Refinitiv data.

Wall Street’s recent sell-off has left the S&P 500 trading at around 17 times expected earnings, its lowest PE valuation since the 2020 sell-off caused by the coronavirus pandemic, according to Refinitiv data.

The CBOE volatility index, also known as Wall Street’s fear gauge, rose to 31 points after falling for six straight sessions.

Volume on US exchanges was 12.5 billion shares, compared with a 13.4 billion average over the last 20 trading days.

Declining issues outnumbered advancing ones on the NYSE by a 5.09-to-1 ratio; on Nasdaq, a 3.52-to-1 ratio favored decliners.

The S&P 500 posted one new 52-week high and 37 new lows; the Nasdaq Composite recorded 25 new highs and 242 new lows.

(Reporting by Amruta Khandekar and Devik Jain in Bengaluru and by Noel Randewich in Oakland, Calif.; Editing by Shounak Dasgupta and Lisa Shumaker)

2024 Mid-Year Economic Briefing: Navigating the Easing Cycle

Investing with Love: A Mother’s Guide to Putting Money to Work

Investor Series: An Introduction to Estate Planning

Quarterly Economic Growth Release: 5.4% Q12025

Policy rate views: Uncertainty stalls cuts