S&P 500 remains under pressure as markets shift their focus to January’s Fed meeting. Over the past 7 sessions, it has been in the red for five sessions; dropping by 7.16%. Over the same timeframe, Dow Jones and Nasdaq has plunged by 5.76% and 9.38% respectively.
Earlier in Tuesday’s session, S&P 500 extended its previous losses to a 7-month low at $4,223.85. While it has since bounced back to the current $4,410.14, it is still on a downtrend.
Since the beginning of the year, the index has dropped by 8.50%. The plunge has been the largest in over nine decades. Granted, in previous years – particularly in 2009 -, there have been faster drawdowns. However, the rebounds have often been quicker.
Investors’ focus is on the US central bank in its efforts to tighten the monetary policy. The subsequent rise in Treasury yields has been weighing on the stock market. At the time of writing, the benchmark 10-year bond yields were at 1.78% after bouncing off Monday’s low of 1.70%. Despite the recent pullback, the bond yields have remained on an uptrend for over a month now; hitting a high of 1.90% in the past week.