US stocks suffer steepest rout in two years

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S&P 500 closes down 4% in worst daily loss since June 2020

Trading updates are shown on monitors on the trading floor at the New York Stock Exchange in Manhattan, New York, the US, May 18 2022. Picture: ANDREW KELLY/REUTERS

“We think the developing impact on retail spending as inflation outpaces wages for even longer than people might have expected is a principal factor in causing the market sell-off today,” said Paul Christopher, head of global market strategy at Wells Fargo Investment Institute. “Retailers are starting to reveal the impact of eroding consumer purchasing power.”

All of the 11 S&P 500 sector indexes declined, with consumer discretionary and consumer staples leading the way lower, both down more than 6%. Federal Reserve chair Jerome Powell vowed on Tuesday that the US central bank will raise rates as high as needed to kill a surge in inflation that he said threatened the foundation of the economy.The S&P 500 declined 4.04% to end the session at 3,923.68 points. The Nasdaq declined 4.73% to 11,418.15 points, while Dow Jones industrial average declined 3.57% to 31,490.07 points.

 

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