Markets Stay Low Amid Macro Pressure
As the Fed continues its aggressive approach to combating inflation, markets are cracking under the pressure.
Grace Lieberman
Grace Lieberman
Jun. 13, 2022 20:09
Markets Stay Low Amid Macro Pressure

(CapitalWatch, June 13, New York) Concern is growing among many investors as the markets and crypto continue their losing streak into the new week. 

Indexes stayed down after closing low on Friday. The S&P 500 Index was down around 3% Monday afternoon, down 120 points. The index is down more than 20% below the all-time high it reached in January. Intraday, it hit its lowest point since March 2021. Stocks were in bear market territory.

The Dow Jones Industrial Average fell over 2% Monday, down 735 points. Boeing (NYSE: BA) and Salesforce (NYSE: CRM) especially dragged down the Dow, having fallen 9% and 6% each today.

The tech-heavy Nasdaq Composite Index was hit by yet another tech selloff, falling almost 4% by 431 points. The index hit a new 52-week low and its lowest level since November 2020.

After weeks of turmoil, cryptocurrency is also continuing its rapid tailspin. Bitcoin and Ethereum have plunged 70% from their respective peaks. It's estimated that crypto investors have lost more than $2 trillion in the last eight months.

Bitcoin was down 11% Monday having fallen below the $25,000 level to around $23,500. The dominant crypto fell more than 20% over the weekend and its market cap fell below $500 billion. Ethereum was down 13% and fell below the $1,300 mark, sitting at around $1,200.

Investors have lost huge chunks of their portfolios as the crypto market continues to crack and fall apart. Some have even claimed to have lost all their savings after putting it into crypto.

Average consumers are being hit hard with inflation and skyrocketing prices. The Bureau of Labor Statistics reported last week that the U.S. consumer price index rose by over 8% from a year ago in May, its fastest increase in decades.

Investors are growing increasingly concerned, causing markets to hit record lows. Although some remain hopeful, the possibility of a recession is weighing on everyone.

The selloffs and ubiquitously disappointing market performance that started this week comes just ahead of the Federal Reserve's much anticipated meeting. Starting tomorrow, officials will deliberate and possibly announce another 50 basis-point interest rate hike to match the results of their May meeting. 

As inflation booms, the Fed must walk a tumultuous line in order to bring down the bloating prices without boosting interest and causing a recession. Ongoing economic impacts from the Russia-Ukraine war and a chaotic environment for supply chains also loom in the background. 

Dipping markets, growing inflation, and the crypto crash are weighing on investors' minds. If things continue in this trajectory, analysts' projections of a bear market will likely come true.

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