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The stock market tanked Monday, with the S&P 500 falling into bear market territory as investors nervously look ahead to the Federal Reserve’s upcoming policy meeting, with last week’s record-high inflation reading leading to a spike in recession fears.


Stocks added to losses after a major sell-off on Friday: The Dow Jones Industrial Average lost nearly 2.8%, nearly 900 points, while the S&P 500 dropped 3.9% and the tech-heavy Nasdaq Composite 4.7%.

The benchmark S&P 500 is on track to hit a new low point for 2022, falling back into bear market territory on Monday and down more than 20% from its record high at the start of the year.

Markets continued to take a hit after the Labor Department reported that inflation unexpectedly returned to record highs last month, spiking 8.6% compared to a year ago and adding to fears of a possible recession.

Investors are now nervously looking ahead to the Federal Reserve’s upcoming policy meeting later this week, with expectations that the central bank will raise interest rates by at least a half-percentage point—if not more—amid growing urgency to combat surging consumer prices.

Rates on government bonds surged on Monday amid the negative investor sentiment: The short-term 2-year Treasury yield jumped to over 3.2%—its highest level since 2007, while also at one point trading above the 10-year Treasury note, a so -called yield curve inversion which typically indicates a looming recession.

The cryptocurrency market saw a huge selloff on Monday, with the price of Bitcoin plunging to its lowest point in nearly two years, falling below $24,000 as investors dumped risky assets amid rising rates.