he stock market tumbled again Monday—with the S&P 500 closing in bear market territory. Bond yields jumped to new heights as fears about Federal Reserve rate hikes persist.
The Dow Jones Industrial AverageDJIA +2.15% fell 875 points, or 2.8%, while the S&P 500SPX +2.45% dropped 3.9%, and the Nasdaq CompositeCOMP +2.51% slumped 4.7%. This comes on top of declines last week, with the S&P 500 falling 6.3% from Tuesday’s close to Friday’s close.
The stock market has now fallen to new lows for the year, which are in bear market territory, defined as a larger than 20% fall. The S&P 500 is trading at about 3750. It had fallen to just above 3800 on May 20, before bouncing back for a short period.
“Risk appetite globally has been hammered by a combination of resumed inflation fear and the presumed Fed response to it,” wrote Bespoke Investment Group strategists.
The 2-year Treasury yield, which attempts to forecast the levels of the federal-funds rate a couple of years from the present, rose to 3.35%, a new multi-year high. It has exploded higher from a pandemic-era low of just over 0.1%.