Why Stocks Plummeted on Monday—And What Experts Say Could Come Next | Global News Avenue

U.S. stocks continued to fall on Monday, with last week’s sell-off extended as economic and political uncertainty continued to erode sentiment on Wall Street.

The S&P 500 fell 2.7%, bringing it 9% higher than the record three weeks ago. Nasdaq High Technology’s combined volume fell 4%, the biggest one-day decline since September 2022, bringing it deeper Correction area. Both indexes have been trading at their lowest levels since September last year.

The Dow Jones industrial average reduced the weight of big tech stocks, down 2.1%, putting it below pre-election levels for the first time. Last week, the S&P 500 and the Nasdaq have eliminated post-election earnings.

How long does the stock last?

Some experts believe the current sell-off may end soon. “It’s a title-driven market; Bolvin Wealth Management president Gina Bolvin said on Monday. “We’re finally getting the corrections we’re waiting for and long-term investors will be rewarded again. ”

LPL Financial portfolio strategist George Smith pointed out in a report last week that selling out is a good buying opportunity. Since 1950, he wrote that the S&P 500 (which precursor index before 1959) has dropped by more than 1.75% on average eight times a day. The index has historically underperformed after selling prices 1 month, 3 months, 6 months and 1 year later.

Of course, Monday’s S&P 500 fell by 1.75% for the third time this month, a frequency more consistent with the loss year-on-year frequency, when the index averaged 15 days and lost 1.75% or more.

Others spoke more cautiously. Technical indicators suggest that the sell-off may have more room to run, Adam Turnquist, chief technical strategist at LPL Financial, wrote on Monday. On Monday morning, about 53% of 500 shares exceeded their 200-day moving average, “this is almost no room for error, as 50% is a general threshold for forks bullish and bearish market breadth.” He wrote: “Most accusers are at/close to the excess level and we warn against buying dips until there is more supportive technical evidence.”

What triggered the sell-off?

Stock markets rattled last month Increased uncertainty About the direction of US policy. President Trump has had two threats to the U.S.’s largest trading partner, imposing and postponing tariffs. He also promised to incur reciprocal tariffs on all imported goods starting early next month.

Investors, businesses and consumers are Worry Tariffs this year will lead to higher inflation. Tariffs are the main reason for consumer sentiment Fall off the cliff Inflation expectations in February also rose.

Investors and economists are also worried about Trump’s Tesla-led efficiency initiative (TSLA) CEO Elon Musk will damage the labor market. The Musk government’s Ministry of Efficiency has begun to revoke federal labor and cancel government contracts to support private sector work. The unemployment rate Just tick it slightly February, Inadequate employment Interest rates calculated part-time workers looking for full-time jobs, jumping from 7.5% to 8%.

“Historically, part-time and temporary positions can provide an early understanding of future employment trends,” Ronald Temple, chief market strategist at asset manager Lazard, wrote in a note on Monday. “The underemployment data adds to my growing concerns that have been linked to a decline in employment rates … which may indicate an increase in vulnerability in the U.S. labor market.”

As tariffs and layoffs are expected to raise prices and grow slowly, Fear of traps It is rising, pushing investors to safe haven assets and stocks in the defense sector. Fiscal yields moving in the opposite direction of bond prices have dropped sharply in recent weeks. Consumer Staples were only slightly lower on Monday, with Beyond the broader market In the past month, the utilities sector of the 500 index rose 1% today, causing the economy to be in a sluggish state.