Stocks sink as inflation, recession fears rattle Wall Street

Stocks fell Tuesday as a steep decline in technology stocks deepened Wall Street’s losses after a brutal start to 2022.

The Dow Jones Industrial Average was down more than 600 points shortly after 2 p.m. Tuesday, a decline of 1.8 percent. The Nasdaq composite was down 3 percent and the S&P 500 index had fallen 2 percent roughly two hours before the closing bell.

Following a year of stellar gains, all three indexes have fallen since the start of the year as investors brace for the continued war in Ukraine, high inflation and the Federal Reserve’s attempts to cool off price growth to cut into corporate profits. Tech stocks that made up much of the market’s massive gains last year are among the leading forces behind the steady decline across Wall Street.

The tech-heavy Nasdaq is down more than 20 percent on the year, falling into a bear market as shares of Apple, Meta, Alphabet, Netflix and Tesla plunge from record highs. All posted significant losses Tuesday, with a 10 percent drop in Tesla stock leading the index downward.

The S&P is down 12.2 percent on the year, beyond what investors consider a correction, and the Dow is down 8.6 percent since the start of 2022.

All three indexes have closed out the past three weeks with losses, reversing a brief comeback derailed by concerns about growing threats to business revenue.

Both the war in Ukraine and COVID-19 lockdowns in China have boosted pressure on prices for food, energy, shipping and manufactured goods after more than a year of high inflation across the globe. Deeper supply chain issues pose a major obstacle to the Fed as it attempts to raise interest rates fast enough to reverse inflation but slow enough to keep the strong U.S. economy growing and adding jobs.

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