S&P 500 Enters Bear Market Ahead of FOMC. How Will Stocks React to the Fed?

[MongiIG]

Jun 13, 2022 | DailyFX
Diego Colman, Market Analyst

US STOCKS OUTLOOK:

• S&P 500 plunges 3.88% and closes in bear market territory for the first time since 2020
• The Nasdaq 100 plummets 4.6%, setting a new 2022 low
• Equity market weakness could continue if the Fed adopts a more hawkish stance at its June meeting this week in an effort to crush inflationary pressures in the economy

U.S. stocks plummeted on Monday, weighed down by soaring U.S. Treasury yields, on expectations that the Federal Reserve will come out swinging and take a tougher stance on inflation at its gathering this week, endorsing a significantly steeper path of interest rate increases.

When it was all said and done, the S&P 500 sank 3.88% to 3,749, setting a new 2022 low and closing in bear market territory for the first time since the 2020. The Nasdaq 100, for its part, bore the brunt of the sell-off, plunging 4.60% to 11,288, also a fresh low for the year.