May 31, 2022, 10:24am
The stock market fell on Monday, failing to build on recent gains after its best week since November 2020, as widespread selling pressure resumed amid growing fears of a looming recession.
The stock market is on pace to finish lower this month.
The last trading day of the month saw the S&P 500 lose 0.7% and the tech-laden Nasdaq losing 0.9%.
The S&P 500 ended last week with its best weekly gain since November 2020 as recession fears cooled thanks to positive economic data.
Concerns about inflation and a potential economic slowdown resurfaced with a vengeance on Tuesday, however, after a flurry of negative headlines out of Europe including Euro zone inflation surging 8.1% in May, a new record high for a seventh month in a row.
The European Union's decision to ban more crude imports from Russia led to a surge in oil prices.
The only positive sector in the S&P 500 was energy, as shares of Occidental, Marathon, and Diamondback Energy all rose 3% or more.
In a new note, Morgan Stanley strategist Mike Wilson warned of a fire and ice scenario for stocks, with a major correction looming later in the summer.
The S&P 500 is on track to finish the month in the red, with the index falling less than 1%. Despite the relief rally last week, stocks are still on pace for another month of losses, with investors worried that rising inflation and rising rates could lead to a possible recession.
Mark Zandi, chief economist at Moody's, says that the recession calls are sure to get louder as the Fed works to rein in inflation and politicians portray the economy's struggles to their advantage.
The Federal Reserve Chair will meet with the President later in the day. Biden wrote in The Wall Street Journal that tackling inflation is a top economic priority for the current administration.
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