By DAMIAN J. TROISE
NEW YORK (AP) — Stocks fell in morning trading on Wall Street Thursday, deepening the decline in major indices as stubbornly high inflation continues to weigh on the economy.
The S&P 500, the benchmark for many index funds, is coming off its biggest drop in nearly two years. It fell another 0.4% and is down nearly 19% from the all-time high it set earlier this year. That’s just shy of the 20% point that defines a bear market. The last bear market occurred just two years ago, after the start of the virus pandemic.
The Dow Jones Industrial Average fell 279 points, or 0.9%, as of 10:02 a.m. ET, and the Nasdaq rose 0.3%.
Rising interest rates, high inflation, the war in Ukraine and a slowing Chinese economy have caused investors to reconsider the prices they are willing to pay for a wide range of stocks, from high-flying technology companies to traditional car manufacturers. Investors have been worried that runaway inflation that is hurting people who buy groceries and fill up their cars is also hitting corporate profits.
Target fell another 3.6% on the day after shedding a quarter of its value on a surprisingly weak earnings report.
Wall Street is also worried about the Federal Reserve’s plan to combat the highest inflation in four decades. The Fed is raising interest rates aggressively, and investors are concerned that the central bank could cause a recession if it raises rates too high or too quickly.