Both Dow Jones and S&P 500 had it extremely rough as September drew to a close, showing evidence that US stocks performed poorly.
The Dow Jones Industrial Average (INDEXDJX: .DJI) and the S&P 500 (INDEXSP: .INX) recorded considerable plunges, representing the worst performance of the year for US stocks. The Dow Jones fell 546.80 points or 1.59%, to close at 33,843.92, while the S&P 500 dropped 1.19% to 4,307.54. The Nasdaq Composite dipped by 0.4% to 14,448.58.
These overall performances were the culmination of a rough month for equities due to surging rates and inflation fears. Also most notably, the growing apprehension over the Chinese property market all contributed to the underperformance of stocks.
The S&P 500 ended September with a 4.8% drawdown, representing its worst month since March 2020. During that period, the pandemic triggered a major market sell-off. In addition to recording its worst-performing month, the index also closed 5% below its record high for the first time in 2021.
According to Ed Yardeni of Yardeni Research, the month of September once more proved its reputation as a difficult one for stocks. Furthermore, Yardeni explained that growing concerns over higher wages, energy prices, and transportation costs will impact earnings. This reportedly will go on for the rest of the year, and into 2022. Yardeni stated that analysts are currently keeping tabs on the situation and remain optimistic.
Some Companies Retained Gains in Dow Jones, S&P 500, But Could Not Match Session Highs
Concerns over inflation and supply chain issues continued to negatively affect the market on Thursday. For instance, shares of Bed Bath & Beyond (NASDAQ: BBBY) fell by 22.1% after the company revealed those aforementioned issues hurt its Q2 results. In addition, the news seemingly hit other retail stocks. For example, Walgreens Boots Alliance and Home Depot dropped 3.4% and 2.6%, respectively. These performances make both companies two of the worst performers on the Dow.
Furthermore, energy and financial stocks, among the best performers in recent weeks, experienced drawdowns on Thursday. Goldman Sachs (NYSE: GS) shares dipped by 1.7%, while JPMorgan Chase (NYSE: JPM) was down by 1.3%.
Although tech stocks did well on Thursday, the Nasdaq still incurred its fifth-straight losing session. The recent increase has notably hit tech firms in the 10-year Treasury yield. Earlier in the week, the figure surpassed 1.567% but dipped slightly on Thursday.
David Bianco of DWS Group also weighed in on the recent September development. In his words:
“We’ve been talking about spooky season – September and October – and the expectation of about a 5% dip from the high. … But we’ve said we don’t expect a correction.”
Bianco mentioned this in reference to a correction, which is a pullback of 10% or greater, from a recent high. Furthermore, Bianco added:
“We expect yields to climb, and that’s why we’re overweight banks, but we don’t expect yields to surge. And without a surge in yields, we can live with these [valuations].”
Apple Inc (NASDAQ: AAPL) and Amazon.com (NASDAQ: AMZN) shares finished the day on a negative note after riding higher during the morning’s trading session. Also, Nvidia Corporation (NASDAQ: NVDA) and Netflix Inc (NASDAQ: NFLX) held on to most of their gains but closed off well short of session highs.