Stock Market This Week (US): Rising inflation and growth concerns push stocks down

Stock Market This Week (US)

The market could not continue the rally from last week. Despite the positive close on Friday, all major averages posted their fourth down week in five. The Dow fell 1.3% for the week. The Nasdaq finished lower by 4.1%, and the S&P 500 lost 2.2%. 

US stock market this week: Stocks movement this week

The US market fell on Monday as the market prepared to wrap up the worst first half for stocks in decades. The major stocks struggled as investments weighed whether stocks have reached the bottom or rebounded from oversold conditions.

The market started the day with gains but erased all gains to end at a low on Tuesday. Investors were still searching for the market bottom and hoping that last week's rally would continue but failed to get any triggers for it. Retail stocks fell after the release of consumer confidence data.

Stocks fluctuated between red and green on Wednesday. Some indices closed lower while some closed slightly in the red. The analysts have started making anticipation of the rate hike number by the Fed. Some analysts are advocating a 75 bps hike in interest rate.

Stocks continued to slide in the US market on Thursday as S&P 500 capped its worst first half in more than 50 years. Pharmacy stock Walgreens Boots Alliance was the biggest decliner in the Dow, it fell 7.2% in a day.

The US stocks rose on Friday to kick start the new quarter. All the major indices were up and rallied up to 1.1%. Investors remained focused on warning signs from several companies that lowered their profit guidance.

US stock market this week: Major events

The worst first half for US stocks: It was the worst first half for US stock investors in 50 years, and it’s all because of one thing - inflation. The S&P 500 posted its worst first half of the year since 1970, hurt by worries about surging inflation and Federal Reserve rate hikes, as well as Russia’s ongoing war on Ukraine and Covid-19 lockdowns in China.

Manufacturing activity weakens: The Institute for Supply Management reported that manufacturing activity in June was weaker than expected. Its index of national factory activity dropped to 53 for the month. It was the lowest reported number since June 2020. ISM’s new orders index also fell to 49.2 from 55.1. It indicates contraction for the first time since May 2020.

Recession worries deepen: Most of the economic data that was released this week missed consensus expectations, and some signals suggest that economic activity might even low more. Also, there is a growing fear that as the central bank aggressively hikes interest rates to fight high inflation, it could tip the US economy into a recession, and executives are cutting back.

Bond market: The yields had moved dramatically higher in the first half of the year – driven by sharply rising inflation and Fed-tightening expectations. In the last couple of weeks, we have seen yields move lower. The 10-year US Treasury yield reached a high of nearly 3.5% in early June but ended the week at around 2.89%.