Stocks fell again on Wall Street on Friday, capping the S&P 500’s worst weekly decline since the pandemic began.
Investors are increasingly worried about rising inflation and the aggressiveness of the Federal Reserve in raising interest rates to curb it. Record-low rates helped support the broader market as the economy absorbed a hit from the pandemic in 2020 and then recovered over the past two years.
The S&P 500 fell 84.79 points, or 1.9%, to 4,397.94. The benchmark has now slipped for three straight weeks to start the year. It fell 5.7% this week, its worst weekly drop since March 2020, when the pandemic sent stocks into a bear market.
The Dow Jones Industrial Average fell 450.02 points, or 1.3%, to 34,265.37 and also fell for its third straight week.
The tech-heavy Nasdaq fell 385.10, or 2.7%, to 13,768.92. With investors expecting the Fed to start raising rates as soon as its March policy meeting, stocks of expensive technology companies and other expensive growth stocks looked relatively less attractive. The index has fallen for four straight weeks and is now more than 10% below its most recent high, putting it in what Wall Street considers a market correction. The Nasdaq is down 14.3% from the record set on Nov. 19.
“As always, once volatility starts, investors are bent on exacerbating downside volatility,” said Nancy Tengler, CEO of Laffer Tengler Investments.
Technology and communications stocks were among the market’s biggest drags on Friday. Video streaming service Netflix plunged 21.8% after posting another quarter of disappointing subscriber growth. Disney, which has also been trying to grow its subscriber base for its streaming service, fell 6.9%.
Inflation fears and worries about the impact of rising interest rates have caused a shift across the market after a strong year of gains in 2021. Tech stocks and consumer-focused companies are fallen into disgrace. Energy is the only S&P 500 sector to post a gain; manufacturers of household goods and utilities, which are generally considered less risky investments, held up better than the rest of the market.