The S&P 500, of which Apple is the No.1 component, dropped 3.9% to end at 3,749.81 on Monday. This set the index more than 20% below its recent record high from January, meaning it has now officially fallen into a bear market.
Emily McCormick for Yahoo Finance:
Treasury yields rose across the curve, with the benchmark 10-year yield jumping to top 3.34% and reach its highest level since 2011.
For the broader markets, investors nervously looked ahead the Federal Reserve’s latest policy-setting meeting later this week, with a rate decision set for Wednesday. Up until Friday’s hotter-than-expected monthly Consumer Price Index, traders widely believed the meeting would set the stage for another half-point rate hike by the central bank, bringing the target range for interest rates between 1.25% and 1.50%. However, after last week’s data showed an unexpected pick-up in inflation to a fresh 40-year high of 8.6% in May, investors have raised their bets on an even bigger move by the Fed.
Fed funds futures, which help track traders’ predictions for where the Fed’s target interest rate band will land, shifted quickly after Friday’s report and showed increased bets on an even more pronounced 75 basis point hike.
“There is very little in the details of [Friday’s CPI] report to suggest that inflationary pressures are easing,” Michael Pearce, senior U.S. economist for Capital Economics, wrote in a note Friday. “The surge in energy prices this month means that headline inflation will remain close to 8.6% in June. Together with the continued strength of the latest activity data, that bolsters the argument of the hawks at the Fed to continue the series of 50 bp [basis point] rate hikes into September and beyond, or even to step up the size of rate hikes at coming meetings.”
At least one survey has shown consumer sentiment plunged to its lowest level since at least the 1970s in the face of rising prices.
MacDailyNews Take: Well, even with the S&P 500 entering a bear market, we didn’t get that sub-$130 entry point for Apple today, but there’s a lot of week left!
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