The S&P 500 fell as much as 2.3 per cent, temporarily dragging the index down more than 20 per cent from its recent high, the common definition of a bear market. It has been the first time the index declined by such a large amount since the sell-off sparked by the start of the coronavirus pandemic in March 2020.The index pared losses later on Friday afternoon, however, closing flat for the day and down 18.7 per cent from its record peak in early January.
Stocks have tumbled this year as central banks, led by the Federal Reserve, rapidly unwind stimulus measures in an attempt to bring down inflation from multi-decade highs, while the Ukraine war has disrupted supply chains and hit commodity prices. At the same time, there are indications that economic growth may be faltering across major global economies.Friday’s fall also left the S&P 500 nursing its seventh straight week of declines, down 3.1 per cent from where it ended the prior week. The index has not sustained such a prolonged fall since 2001.
The technology-heavy Nasdaq Composite closed down 0.3 per cent, adding to losses from the previous two days and ending the week more than 3.8 per cent lower.In a sign of the worries sweeping across markets, investors yanked $5.2bn from global equity mutual funds in the week to Wednesday, bringing outflows over the past four weeks to around $16bn, according to a Goldman Sachs report.