US stock sell-off deepens as the S&P 500 dips below 4,000 for the first time in a year and the Nasdaq falls over 4%

  • US stocks plunged Monday, with the S&P 500 dipping below 4,000 for the first time since April 2021. 
  • The tech-heavy Nasdaq dipped more than 4%, and the stock market’s “fear gauge” jumped.
  • Stocks and bonds are in a simultaneous correction for the first time in over 50 years.

The brutal market sell-off continued Monday, with each of the three major indexes ending lower to begin the week. The S&P 500 sunk below 4,000 for the first time since April 2021 and the tech-heavy Nasdaq lost more than 4%.

The Cboe Volatility Index, the so-called fear gauge of the stock market, surged to 34.66 Monday. 

The sell-off in stocks came even as the yield on the 10-year Treasury note edged lower to about 3.04%, down from Friday’s 3.1%, as investors look to escape the carnage in equities. 

So far in 2022, there’s been nowhere to hide in markets as stocks, bonds, and crypto have all been getting crushed, and stocks and bonds are in a simultaneous correction for the first time in over 50 years.  

“In my opinion, investors have turned too pessimistic about the outlook for the US economy and stock market,” veteran stock market bull Edward Yardeni told the Financial Times Monday. “I don’t recall so much stock bearishness in a very long time.” 

Here’s where US indexes stood as the market closed 4:00 p.m. on Monday: 

Morgan Stanley analysts said in a Monday note that retail traders have now lost all the money they gained during the pandemic.

Twitter stock fell in Monday’s session. Short seller Hindenburg Research published a report saying the company’s implied price would be 37% lower in the absence of Elon Musk’s takeover bid. The Tesla chief, the analysts wrote, holds all the leverage in the deal, and it is possible he reprices his bid. 

On Wall Street, Goldman Sachs is set to stop doing work with most SPACs due to liability concerns amid tighter regulation in the space, Bloomberg reported. But the investment bank may change course if the SEC scales back its SPAC oversight guidelines. 

In commodities, lumber prices fell to their lowest level of the year Monday, as the highest mortgage rates in 13 years dent housing demand. 

Overseas, China’s yuan hit an 18-month low against the dollar, with Beijing’s Covid lockdowns dragging down the economy and as US bond yields remain elevated. 

Meanwhile, the three biggest cryptocurrencies by market cap — bitcoin, ether, and solana — all tumbled Monday. Shares of Coinbase and Silvergate Capital tanked with the broader token selloff.

Oil moved lower, with West Texas Intermediate down 6.7% to $102.39 a barrel. Brent crude, the international benchmark, moved down 6.4% to $105.20 a barrel. 

Gold edged lower 1.53% to 1,853.20 per ounce. The 10-year yield dipped 8.4 basis points to 3.04%.

Bitcoin plunged 11.64% to $30.569.95.