Nasdaq ends with 4.3% loss as US stock market plunge continues

All three major indices were pummelled in another ugly trading session on May 9, 2022. PHOTO: REUTERS

NEW YORK (AFP, BLOOMBERG) - The Nasdaq tumbled more than four per cent as Wall Street equities endured another battering Monday (May 9) amid worries over inflation, rising interest rates and a slowing economy.

All three major indices were pummelled in another ugly trading session, with the Dow Jones Industrial Average falling two per cent, or more than 650 points, to end the day at 32,245.70.

The broad-based S&P 500 slid 3.2 per cent to 3,991.24, its first close under 4,000 points since March 2021.

Among the hardest hit in the recent sell-off have been technology and growth stocks, whose valuations rely more heavily on future cash flows.

The tech-heavy Nasdaq Composite Index was the biggest loser, dropping 4.3 per cent to finish at 11,623.25. The Nasdaq has shed about US$1.5 trillion (S$2.09 trillion) in market value after three days of heavy selling.

The drop has stocks approaching a bear market, Wall Street’s term for a decline of 20 per cent or more from recent highs, a retreat that serves as a marker of a severe shift in sentiment.

Through Monday, the S&P 500 index had dropped 16.8 per cent from a Jan 3 record. The Dow ended Friday down nearly 11 per cent from its Jan. 4 peak. The Nasdaq is already in bear-market territory - having ended last week down 26 per cent from its mid-November record. 

Stocks have been under pressure for much of 2022, with the latest round of weakness sparked by last week's Federal Reserve meeting when policymakers announced the biggest interest rate hike since 2000 and signaled more aggressive tightening ahead.

Markets are also edgy over supply chain problems due China's Covid-19 lockdowns and the upheaval from the Russian invasion of Ukraine. And investors are girding for another ugly US consumer price report later this week.

"Investors still aren't ready to buy the dip," said Gregori Volokhine of Meeschaert Financial Services. "There is zero confidence it's going to shift anytime soon, and it isn't clear what the catalyst could be to turn things around."

Ten of the 11 sectors in the S&P 500 finished lower, with only the consumer staples group mustering a tiny gain.

Large tech names continued to retreat with Amazon losing 5.2 per cent and Netflix falling 4.4 per cent.

Petroleum-linked companies, which have generally outperformed the market in 2022, also had a bad day. ConocoPhillips lost nearly 10 per cent while Chevron tumbled 6.7 per cent.

Rivian Automotive plunged more than 20 per cent following a report that Ford will unload eight million shares of the electric truck maker.

But Philip Morris International gained 0.9 per cent after it confirmed it was in talks to acquire Swedish Match in a deal that would boost its smokeless offerings. Both companies cautioned that a deal was not certain.

Join ST's Telegram channel and get the latest breaking news delivered to you.