The Clap
Major stock market indexes took a beating yesterday as investors absorbed the implications of May’s inflation data.
The deets
It was all red & then some more for the three major indexes. The Dow Jones closed almost 3% down, the S&P 500 almost 4% down, & the Nasdaq down 4.68%.
With the drop, S&P 500 reentered bear market territory (down 20% or more since its last peak) after briefly flirting with it three weeks ago.
Why this matters
Investors hoped the Fed finally got a grip on soaring inflation when it dropped slightly in April, but the uptick in May now has investors fearing a 0.75% interest rate hike as the Fed meets today & tomorrow.
Driving more fear into investors is the inversion of the yield curve yesterday, a major sign of recessions.
