The benchmark stock index, which reflects a wide range of industries and companies, finished down 151.23 points to close at 3,749.63—21.8% percent off the record high it reached on Jan. 3. Investors call it a “bear market” when an index falls at least 20% from its latest high point. The sell-off came after Friday’s inflation report showed consumer price increases were accelerating instead of abating. The May inflation rate rose to 8.6%, marking a fresh high since 1981. Investors are concerned the disappointing report will encourage the Federal Reserve, which is trying to tamp down inflation with more expensive borrowing costs, to raise interest rates higher and faster, potentially creating more drag on the economy. The central bank will announce its next rate increase Wednesday. The S&P 500 had flirted with bear territory, briefly crossing the threshold on May 20 before starting to make up for lost ground. By June 7 it had climbed back to 4,160.68, just 13.3% off its January high. The Nasdaq also finished Monday down 530.80 points to close at 10,809.23, putting the tech-heavy index 32.7% below its Nov. 19 high of 16,057.44. Meantime, the Dow Jones Industrial Average dropped 876.05 points to finish at 30,516.74. The Dow’s 17% decline from its Jan. 4 high of 36,799.65 is more than the 10% difference that defines a market “correction,” but still not in bear territory. Have a question, comment, or story to share? You can reach Terry at tlane@thebalance.com. Want to read more content like this? Sign up for The Balance’s newsletter for daily insights, analysis, and financial tips, all delivered straight to your inbox every morning!
