Recession fears hit Wall Street on Monday, leading to a broad rout in stocks, bonds, and cryptocurrencies as investors searched for somewhere to hide.
The Dow Jones industrial average dropped 1.9%, while the S&P 500 and tech-heavy Nasdaq Composite sank 3.2% and 4.3%, respectively.
“Monday’s declines are being driven in part by fears that the Fed’s efforts to tame inflation may end up causing a recession,” William Huston, the chief investment officer of Bay Street Capital Holdings, told Fortune. “Corporate earnings tend to suffer during recessions, and that’s what the stock market is worried about.”
Boeing led the Dow lower, falling 10.5%, while the Argentinian e-commerce leader Mercado Libre proved the biggest loser in the Nasdaq, sinking 16.9%.
Tech stocks were under particular pressure on Monday, with stalwarts like Amazon and Apple sinking 5.2% and 3.3%, respectively.
The once high-flying A.I. darling Palantir Technologies saw its stock crater more than 21.3% after posting a disappointing growth outlook in its quarterly earnings report. Shares of Rivian sank 20.9% the day after reports revealed that Ford had unloaded 8 million shares of the EV startup and that JPMorgan planned to sell an additional 13 million to 15 million shares for an unknown seller.
“It’s a perfect storm for investors with nowhere to hide as Fed hikes, inflation, geopolitical issues, and worries about a recession abound,” Wedbush Securities’ Dan Ives told Fortune. “Tech stocks are getting crushed on this flight to safety, and it’s a bear market mentality with the pain threshold being tested for tech investors.”
Bonds also had an off day, with the S&P 500 Bond Index sinking almost 1%, capping off a more than 11% drop year to date.
Cryptocurrencies didn’t offer any respite for investors either as the total crypto market cap sank over 10% to below $1.5 trillion on Monday. The leading digital asset, Bitcoin, plummeted roughly 8% to around $31,000, and Ether followed suit, falling 11% to under $2,300 on the day.
For the diversified investor, it was a dark day on Wall Street and typical safe-haven assets didn’t provide any help. Gold prices fell over 1.5% on Monday to around $1,850 per ounce in a broad rout for commodities.
Brent Crude oil prices, the international benchmark, fell 6.4% to $105 per barrel as the EU dropped its plan to stop oil tankers from transporting Russian supplies.
Wheat and corn prices also dipped 1.65% and 1.56%, respectively, while lumber futures fell 2% to trade at roughly $815 per thousand board feet.
