- So many investors are worried about how long inflation will last.
- More than 1,050 points were lost on the Dow.
- There was a decline all over.
Investors are worried about inflation because it keeps going up. The Dow fell more than 1,050 points, or 3.3%, by late afternoon on Tuesday. Even worse, both the S&P 500 and the Nasdaq fell by 3.6% and 4.5%, respectively.
All eleven market sectors went down, so there was a general decline. Banks, retailers, and IT companies were among the biggest losers. If the Federal Reserve raises interest rates more quickly to try to stop inflation, these three groups are likely to be hurt the most.
The main worry on Wall Street is that if rates keep going up, the economy will eventually slow down or even go into a recession.
Related: Inditex, which owns Zara, saw its first-half sales rise before a possible slowdown.
Before Tuesday, stocks had been going up for four days in a row. One market expert said that the market would have more bad times in the future. Traders may have been wrong to think that inflation will soon stop being a big problem for the economy.
Mark Hackett, the head of investment analysis at Nationwide, said in a study that investors had become too comfortable after the market went up 5% in the last week. Even though the reaction is big, it only brings the S&P 500 Index back to where it was on Wednesday.