Stock futures fall slightly with the S&P 500 on the verge of a bear market

Stock futures fell Thursday night as investors braced for the S&P 500 to potentially slide into official bear market territory.

Futures contracts linked to the Dow Jones Industrial Average lost 68 points, or 0.2%. S&P 500 futures lost 0.2% and Nasdaq-100 futures fell 0.3%.

On Wednesday, the S&P 500 and Dow Jones bounced off their intraday lows but still fell 0.1% and 0.3%, respectively. The S&P closed down more than 18% from its all-time high and will be in an official bear market if that loss reaches 20%. The Dow Jones has fallen for six consecutive trading sessions.

The Nasdaq posted a gain of less than 0.1% on Wednesday, but the tech-heavy index is already in a bear market, down more than 29% from its all-time high.

The stock market has been crashing for months, starting with unprofitable high-growth tech stocks late last year and extending even to companies with healthy cash flows in recent weeks. On Thursday, Apple fell into its own bear market, becoming the latest of the big tech names to succumb to the selloff.

The decline erased much of the rapid gains that stocks enjoyed from their March 2020 pandemic lows.

“Large deviations from long-term price trends were used for bubble identification. We see that US stocks have been in a bubble based on this metric and are now coming out of it,” said the Citi strategist Dirk Willer in a note to clients Thursday. .

High inflation and the Federal Reserve’s attempts to contain prices by raising rates are one of the reasons stocks have struggled in recent months. Fed Chairman Jerome Powell told NPR on Thursday that he could not guarantee a “soft landing” that would bring inflation down 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 the sell-off continued into May. There are some signs, such as investor sentiment surveys and some stabilization in the Treasury market this week, that the market may be close, but many investors and strategists say the market may need to take another step forward. important front.

“You get this market that’s really asking for a bottom, a relief rally. But, at the end of the day, there really wasn’t a day of capitulation,” said Andrew Smith, chief investment strategist at Delos Capital. . Advisors.

Developments in cryptocurrencies also baffled Wall Street this week, with bitcoin falling well below $30,000 and stablecoins struggling to hold their peg.

On the economic data front, Friday features a reading of April import prices and a first look at consumer confidence in May.

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