{"id":6248,"date":"2023-10-28T03:11:56","date_gmt":"2023-10-28T03:11:56","guid":{"rendered":"https:\/\/infundpros.com\/business\/sp-500-falls-into-correction-after-losing-10-from-summer-peak\/"},"modified":"2023-10-28T03:11:56","modified_gmt":"2023-10-28T03:11:56","slug":"sp-500-falls-into-correction-after-losing-10-from-summer-peak","status":"publish","type":"post","link":"https:\/\/infundpros.com\/?p=6248","title":{"rendered":"S&#038;P 500 falls into correction after losing 10% from summer peak"},"content":{"rendered":"<div>\n<p>Stay informed with free updates<\/p>\n<p class=\"article__content-sign-up-topic-description\"><span>Simply sign up to the <!-- -->US equities<!-- --> myFT Digest &#8212; delivered directly to your inbox.<\/span><\/p>\n<p><iframe class=\"article__content-sign-up-iframe close\" scrolling=\"no\" id=\"signUpIframe\" data-prev-url=\"\/register\/in-article-sign-up?ft-content-uuid=839d42e1-53ce-4f24-8b22-342ab761c0e4&amp;concept-id=971c884d-f8fa-45c8-af59-bee0d7f28284\"><\/iframe><\/div>\n<div id=\"article-body\">\n<p>The S&amp;P 500 stock index has fallen more than 10 per cent from the high point it touched earlier this year, meeting the popular definition of a market \u201ccorrection\u201d as investors fret about interest rates, geopolitical risks and mediocre third-quarter company results.<\/p>\n<p>Wall Street\u2019s blue-chip equities benchmark dipped 0.5 per cent on Friday, pushing it just over the correction threshold compared with its 2023 peak on the final day of July.<\/p>\n<p>The US stock market surged in the first seven months of the year, driven by enthusiasm about artificial intelligence and optimism that the Federal Reserve was approaching the end of its campaign to raise interest rates.<\/p>\n<p>However, it is now on track for its third consecutive month of declines, the longest monthly losing streak since the outbreak of the coronavirus pandemic in early 2020. The Nasdaq Composite index also fell into a correction earlier this week, though it recovered slightly on Friday.<\/p>\n<p>\u201cIt\u2019s been a bit of a slow-motion sell-off,\u201d said Stuart Kaiser, head of US equity trading strategy at Citigroup. \u201cSentiment is generally negative\u2009.\u2009.\u2009.\u2009[but] stress metrics haven\u2019t moved that much, it\u2019s been relatively orderly.\u201d<\/p>\n<p>The S&amp;P 500 dropped at least 2 per cent in a day on more than 20 occasions last year, while this year it has happened only once, in February.\u00a0The Vix volatility index, which tracks expectations of stock market swings over the next month, is only marginally above its long-term average.<\/p>\n<p>However, a combination of factors have been driving the market gradually lower, the biggest being the realisation that the Fed is likely to keep interest rates high for an extended period to bring inflation under control.<\/p>\n<p>That has driven up yields on US government bonds, with the benchmark 10-year yield touching a 16-year high at the start of this week. Higher rates reduce the relative value that investors are willing to place on stocks, particularly those that are valued primarily on the promise of profits far in the future.<\/p>\n<p>\u201cA bird in the hand is worth something now,\u201d Schroders chief investment officer Johanna Kyrklund told reporters earlier this week. \u201cThe [fear of missing out] market is done, it\u2019s the \u2018do your homework\u2019 market now.\u201d<\/p>\n<p>Pressure from interest rates has been exacerbated by the outbreak of war between Israel and Hamas, which has driven a flight towards assets perceived as havens such as gold and the Swiss franc.<\/p>\n<p>With large US companies in the midst of third-quarter earnings season, a few high-profile disappointments have added to the negative mood among investors despite the fact profits overall have been resilient.<\/p>\n<p>Google parent Alphabet dropped almost 10 per cent on Wednesday after narrowly missing revenue forecasts in one division, whereas companies that beat expectations, such as Microsoft, enjoyed only modest share price gains.<\/p>\n<p>Kaiser said the contrasting reactions suggested investor positioning in some stocks had become stretched after long rallies earlier in the year, but he said he was \u201ccautiously optimistic\u201d about the prospects of a turnaround by the end of the year.<\/p>\n<p>Kaiser said: \u201cIt\u2019s easy to get distracted by some of the moving parts and the event risk, but the bottom line is that the underlying macro picture is still strong.\u201d <\/p>\n<p>Despite its recent swoon, the S&amp;P 500 is still up 7 per cent this year and 15 per cent higher compared with its nadir during last year\u2019s bear market. <\/p>\n<\/div>\n<p>Read the full article <a href=\"https:\/\/www.ft.com\/content\/839d42e1-53ce-4f24-8b22-342ab761c0e4\" target=\"_blank\" rel=\"noopener\">here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Stay informed with free updates Simply sign up to the US equities myFT Digest &#8212; delivered directly to your inbox. The S&amp;P&#8230;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[22],"tags":[],"class_list":{"0":"post-6248","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-business"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.3 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>S&amp;P 500 falls into correction after losing 10% from summer peak | inFundPros<\/title>\n<meta name=\"description\" content=\"Stay informed with free updatesSimply sign up to the US equities myFT Digest -- delivered directly to your inbox.The S&amp;P 500 stock index has fallen\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/infundpros.com\/?p=6248\" \/>\n<meta property=\"og:locale\" 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