S&P 500 Briefly Falls Into Bear Market Territory

Stocks continued to drop for a seventh consecutive week, briefly driving the S&P 500 index into bear market territory for the first time since early 2020. 

The selloff marked a shift from rapid stock market gains during the pandemic and followed a period of market volatility amid persistent high inflation and recent interest rate hikes by the Federal Reserve. Falling stock prices were broad-based but heaviest among big tech firms; since the start of 2022, Apple stock dropped 26%, Amazon stock dropped 38% and Uber stock dropped 45%. 

Investors were also concerned about the risk of a recession. Recessions have often accompanied bear markets in the past. Several outlets have covered investors’ evaluations of recession risks; Goldman Sachs, for instance, predicted a 35% chance of a recession in the next two years. The Fed’s interest rate hikes, which aim to curtail inflation, also risk slowing down the economy; on May 12, Fed Chairman Jerome Powell said bringing the economy to a “soft landing” would be “challenging.”

Coverage was less common in major right-rated outlets on Friday afternoon, with the exception of Fox Business (Lean Right). Many major left and center-rated outlets, particularly business outlets, prominently featured the story on homepages. Coverage in left-rated outlets was more likely to point out the historical correlation between bear markets and recessions. Update 5/20/22 5:42 PM ET: Stocks rallied back above bear market levels Friday evening.