Stocks slid on Tuesday, adding to a losing streak that has April shaping up to be Wall Street’s worst month in two years.
The S&P 500 fell 2.8 percent, bringing its losses for the month to 7.8 percent. The index is on track for its worst monthly decline since March 2020, when stocks plunged 12.5 percent as the coronavirus spread around the world, prompting lockdowns and halting economic activity.
The steady drop — with only six days of gains in April — has come as investors have confronted a long list of fears: that the Federal Reserve could raise interest rates far more quickly than economists had anticipated; that rising prices and wages could erode corporate profits; and that renewed lockdowns in China could become another drag on the global economy.
Earlier this month, the International Monetary Fund projected global growth would slow this year to 3.6 percent, from 6.1 percent in 2021. That was before a new Covid outbreak in Beijing raised concerns about more restrictions in China, the world’s second-largest economy, where cities like Shanghai have already been under lockdown for weeks.
“China slows down the rest of the world if it shuts down,” said Victoria Greene, the chief investment officer at G Squared Private Wealth, an advisory firm. “If China shuts down, that could shut down commerce, and that slows down overall global demand.”
On Tuesday, technology stocks led the retreat on Wall Street, ahead of earnings reports from Alphabet, Microsoft and — later in the week — Meta, Amazon and Apple. Shares of all five companies were lower. The Nasdaq composite, which is heavily weighted toward tech, fell about 4 percent.
Also lower were shares of Tesla, which fell more than 12 percent. The company’s chief executive, Elon Musk, may have to sell a big chunk of his stock in the carmaker to fund his takeover of Twitter. He has pledged $21 billion in cash as part of the deal, in addition to loans. Tesla’s shares are often more volatile than those of other large companies, and they can weigh on the broader S&P 500 when they fall because of the company’s huge valuation.
“Tesla investors are worried that Musk might spend too much time trying to fix the social media giant’s problems, and that will take away his laserlike focus in winning the electric vehicle race,” said Edward Moya, a senior market analyst at OANDA.
Among the worst performers in the S&P 500 was General Electric, which fell 10.3 percent after it said its outlook for the year was “trending toward the low end” of its previous forecast for profits and listed nearly every one of Wall Street’s concerns as a factor.
“We’re experiencing increased pressure from inflation, renewable energy and the Russia-Ukraine war,” H. Lawrence Culp Jr., the company’s chief executive, said on a conference call with investors on Tuesday, when explaining the outlook. “We’re also watching to evolving areas, namely additional supply chain pressure and recent Covid impacts in China.”
The Russia-Ukraine War and the Global Economy
Concerns over an economic slowdown in the United States and abroad have weighed on investors’ minds all month. Already, companies and consumers have borne higher costs for goods and transportation, with inflation reaching 8.5 percent in the year through March.
But the conflict in Ukraine and the shutdowns in China have…
Read More: Stocks drop 2.8%, led lower by tech, as April’s slump continues.