U.S. stocks endured the worst one-day selloff in two years yesterday (May 18) as fears over
higher interest rates and a potential recession drove investors out of equities.
The selloff sent the S&P 500 index down 4%, the most since June 2020, with the plunge in
consumer shares surpassing 6%. The Nasdaq 100 fell the most among major benchmarks,
dropping more than 5% as growth-related technology stocks sank. The Dow Jones Industrial
Average fell 3.6%.
Major holdings such as Apple (AAPL) and Amazon (AMZN) each fell more than 5% on the day.
Stocks of retailers suffered broad-based declines after Walmart (WMT) and Target (TGT)
missed Wall Street expectations for their first quarter earnings, saying they couldn’t overcome
higher costs as inflation continues to run rampant.
Target’s stock fell more than 20% in its worst rout since 1987, after trimming its profit forecast
due to a surge in costs. Shares of Walmart and Macy’s were also caught in the selloff.
At the same time, U.S. treasuries rose across the board, sending the 10- and 30-year Treasury
yields down more than 10 basis points. The U.S. dollar rose against all of its Group-of-10
counterparts, except the Japanese yen and Swiss franc.
The benchmark S&P 500 index is now in its longest slump since 2011, but any rebound is
looking fragile amid tightening monetary policy, the war in Ukraine, and China’s ongoing
COVID-19 lockdowns.
Looking ahead to today, stocks are falling again across the board, with the S&P 500 down
1.52% in pre-market trading and the Nasdaq down 1.75%. The Dow Jones Industrial Average is
down more than 400 points, or 1.41%, ahead of the markets opening.
