S&P 500 briefly falls into bear market territory as recession fears mount

The S&P 500 briefly fell into bear market territory Friday, slipping more than 20% from its record high and potentially ending the bull run that began in March 2020. A reversal late in the day pushed the index higher at the market’s close and saved it from reaching an official bear market designation.

The S&P 500 managed to squeak 0.01% higher at Friday’s closing bell, or about 18% down from its January 3 record high, after falling by as much as 2.3% earlier in the day.

The move comes on the heels of seven straight weekly losses for the index and follows months of precipitous market drops. The S&P 500 has long been considered the most accurate measure of the nation’s stock performance.
In the three years prior to this near-bear market, the index grew by 90%.

The index’s slide highlights investors’ increasingly dark economic outlook — one fueled by slowing economic and earnings growth, rising inflation and the Federal Reserve’s subsequent monetary tightening.

These conditions will likely continue until there’s enough economic data to prove that inflation is cooling, said Liz Young, head of investment strategy at SoFi. “I don’t think we’re at quite peak freakout yet,” she said. “It might not be enough just to cross over into bear territory.”

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