Nasdaq closes month close to 14-year low as fears of recession grow stronger

The technology-heavy Nasdaq fell 4.2% on Friday, pulled down Amazon (AMZN)which fell almost 15% after missing earnings expectations.

The S&P 500 fell about 3.6% on Friday, while the Dow fell about 940 points, or 2.8%.

The most closely monitored inflation measure published on Friday – the core price index for personal consumption expenditure – rose 5.2% from a year ago, meaning more problems for the economy.

The Nasdaq fell about 12% this month, the S&P 500 lost more than 7% and the Dow fell by almost 4%.

An ever-increasing number of headwinds are leaving investors uncertain about what will come next. This earnings season has been lukewarm, with US gross domestic product falling by 1.4%, well below analysts’ estimate of a 1% increase. The Federal Reserve has shifted to a hawkish stance, indicating that it will increase the pace at which it raises interest rates next week.

Globally, the conflict between Russia and Ukraine exacerbated commodity price inflation, leaving companies uncertain about their second-quarter prospects. China has seen deteriorating growth and continues to rattle global supply chains with its zero-covid policy closures, and the globalization trend is hurting multinational companies in S&P.

Nasdaq is now in bear market territory, about 23% below its highest. The S&P 500 is more than 13% lower than its high, and the Dow is 10% lower than the record.

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Bank of America analysts on Friday trimmed 100 points from their S&P 500 target at the end of the year to 4,500. The average peak-to-valley decline in the S&P 500 in the midst of recessions is around 32%, they said, meaning the current 10% year-to-date decline “can be interpreted very roughly as discounting a third chance of a recession . “

If the likelihood of a recession increases, the bank said, steep declines could continue.

Next week, investors will closely follow the Fed’s political meeting, the job report in April and several companies’ earnings from Starbucks, Uber, Lyft and Pfizer.

Correction: An earlier version of this story incorrectly indicated Nasdaq’s closing level.

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