May 2, 2022 - Economy

Ugliest month for stocks since COVID first hit

S&P 500 percentage change
Data: FactSet; Chart: Will Chase/Axios

The stock market fell off the ugly tree in April, hitting every branch on the way down.

Driving the news: The closing bell on Friday marked the end of a nasty day, a dismal week and a miserable month in what's turning into a horrible year for the S&P 500.

  • The benchmark U.S. index lost 3.6% on the day, pushing it down 8.8% for the month. That's the worst monthly decline since the COVID crisis hit in early 2020.
  • The index is down 13.3% this year. A full-year performance like that would be the market's worst showing since 2008.
  • The selloff in the tech-heavy Nasdaq composite index was even worse in April, as it collapsed by 13.3%. Large-cap technology stocks, which hold large sway in the market-cap-weighted S&P 500, were also key drivers of the S&P's plunge.

What's going on: It's the Fed. Expectations of an aggressive campaign of rate hikes — the central bank is expected to raise interest rates by half a percentage point on Wednesday — collided with growing worries about the health of the economy and corporate profits.

  • China's anti-COVID lockdowns — and their impact on the world's second-largest economy and global supply chains — are also turning into a big concern.

What we're watching: Fed chair Jerome Powell's press conference on Wednesday. If he talks tougher still on inflation and hints at a faster pace of rate hikes, an awful April could be followed by a miserable May.

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