Stocks dropped on Monday, with the S&P 500 setting a new closing low for 2022 and the Dow Jones Industrial Average slipping into bear market territory, as continued fears of a looming recession sparked by the Federal Reserve's interest rate hikes and turbulent currency valuations impacted Wall Street. The Dow lost over 300 points, while the S&P 500 and Nasdaq fell 1% and 0.6%, respectively.
Here's how the market settled on Monday:
S&P 500 Index
Dow Jones Industrial Average
Nasdaq Composite Index
Monday's moves caused the S&P 500 to fall below its June 16 low of 3,666.77. Moreover, at one point during the session, the inde slipped to 3,644.76, less than eight points from its 2022 intraday low of 3,636.87. The Dow also fell about 20.4% from its Jan. 4 closing high on Monday, putting the 30-stock index into bear market territory.
Last week, the Dow hit a 2022 low after losing 4% for the week, while the S&P 500 dropped 4.6% and the Nasdaq fell about 5%.
Driving the session, the British pound plunged to a record low on Monday against the U.S. dollar, falling 4% to one point to an all-time low of $1.0382. The decline came after the United Kingdom recently announced plans to issue its biggest tax cut in 50 years and increase investments to boost growth.
The U.S. dollar has strengthened as the Federal Reserve continued to aggressively raise interest rates, raising concerns for international trade.
"Such U.S. dollar strength his historically led to some kind of financial/economic crisis," Morgan Stanley
In recent weeks, Wall Street has feared the central bank's hawkish actions to stabilize prices will tip the U.S. economy into a recession. However, Atlanta Federal Reserve President Raphael Bostic believes the Fed can cool down inflation without majorly impacting the economy.
"We need to have a slow down. There's no question of that," Bostic told CBS' "Face the Nation" in an interview on Sunday. "But I do think that we're going to do all that we can at the Federal Reserve to avoid deep, deep pain."
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