S&P 500 Briefly Falls Into Bear Market Territory

Headline Roundup May 20th, 2022

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.

From the Center

The stock market tanked on Friday, adding to heavy losses this week that pushed the S&P 500 into a bear market, down over 20% from its peak in January as investors continue to get whipsawed by concerns about inflationary pressures and rising rates.

The selloff on Wall Street continued with a vengeance: The Dow Jones Industrial Average fell 1.6%, over 500 points, while the S&P 500 lost 1.9% and the tech-heavy Nasdaq Composite 2.7%.

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From the Right

The S&P 500, the broadest measure of the U.S. stock market, slipped into bear market territory on Friday. 

The benchmark is now down 20% from its January high of 4,796.56 and needs to close at or below 3,837.25 for the official start. 

"I think you would expect with the Fed raising rates that all these assets, trillions of worldwide, would have to be repriced. But we have to get inflation under control" said James Bullard, President of the Federal Reserve Bank of St. Louis during an exclusive interview with FOX Business. 

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From the Left

It's been a tough year for stocks — and it's only getting worse.

On Friday, the S&P 500 index entered an intraday bear market for the first time since 2020 and also signaled a market close below a January record.

A bear market occurs when a stock index declines 20 percent or more from its most recent high.

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