Dow Jones drops 500 points after plunging 8% in September: Wall Street drops for third consecutive quarter in longest losing streak since Great Recession
- Wall Street ended September and the third quarter on a negative note on Friday
- Dow lost 500 points in the session, extending September losses to 8.8%
- The S&P 500 composite and Nasdaq both fell 1.5% in Friday’s session
- For the first time since 2008, the three indices have lost for three consecutive quarters
Wall Street ended Friday — the last day of the month and quarter — on another negative note, with major stock indices posting their third consecutive quarterly loss for the first time since the Great Recession.
The Dow Jones Industrial Average fell 500 points for a 1.7% loss on the day, marking a decline of 8.8% for the month of September, 6.6% for the quarter and 21% since the start. of the year.
The market’s recent dismal performance comes on the heels of historically high inflation, rapidly rising interest rates and fears that the economy could soon collapse into a sharp downturn with massive layoffs and soaring unemployment .
In the first nine months of 2022, Wall Street suffered three straight quarterly declines, the longest losing streak for the S&P 500 and Nasdaq since 2008, and the longest quarterly fall for the Dow in seven years.
The Dow Jones Industrial Average fell 500 points for a 1.7% loss on the day, marking an 8.8% drop for the month of September
A trader works on the NYSE floor on Thursday, with Dow Jones shares closing another 500 points on Friday
The S&P 500 fell 1.5% on Friday and is at its lowest level in nearly two years. The Nasdaq also fell 1.5% after losing 10.5% in September.
“It’s another lousy day to end a lousy quarter in what’s shaping up to be a very lousy year,” said Ryan Detrick, chief market strategist at Carson Group in Omaha, Nebraska.
“Investors will look back and realize this was the year the Fed pulled back a total of 180 views on inflation and quickly became incredibly hawkish.”
The Federal Reserve rattled markets as it embarked on its most relentless round of interest rate hikes in decades to rein in stubbornly high inflation, leading many market participants to watch key economic data to looking for signs of an impending recession.
“The realization that the Fed has been doing everything it can to fight high inflation for 40 years has investors worried about pushing the economy over the edge and into recession,” Detrick added.
The Dow Jones has lost 21% since the start of the year, falling for three consecutive quarters
The Commerce Department’s Personal Consumption Expenditure (PCE) report did little to allay those fears.
It showed that while consumers continue to spend, the prices they pay have continued to accelerate, drifting further beyond the Fed’s inflation target.
The new data virtually guarantees that the central bank’s hawkish monetary policy will continue for longer than investors had hoped.
Recession fears also echoed dire warnings from Nike Inc and cruise line Carnival Corp, both citing inflation-related pressures on margins.
Corporate earnings reports for the quarter ending with Friday’s closing bell will start landing in a few weeks, and analyst expectations are on the downside.
Analysts now expect S&P 500 annual earnings growth of 4.5%, in total, down from the 11.1% estimate at the start of the quarter.
End-of-quarter fund reallocations and so-called “fronting” likely contributed to the session’s volatility.