Large Cap indices moved into correction territory last week, down more than 10% from recent highs, but rallied back by the weekend. The Russell 2000 Index of small-cap stocks tested bear market territory, down nearly 20% off its November peak, but also rebounded.
The U.S. stock market suffered its worst week of performance since March 16, 2020's pandemic sell-off. Rising rate fears and growth concerns hit markets hard, with tech shares taking much of the brunt causing the NASDAQ Composite to plunge 7.5%.
As earnings season gets into high gear, inflation and rate worries continue to weigh on investors. The major US indices recorded their second consecutive weekly loss and the tech-laden NASDAQ posted its third. Financial shares were also under pressure as JP Morgan and Citigroup reported lower fourth-quarter profits. Energy shares rallied on higher oil prices, which have revisited late-October highs.
With bond yields on the rise, stocks staged a formidable retreat in their first week of trading for the year. Higher rates particularly took a toll on growth and technology stocks, which suffered their biggest weekly decline in nearly a year, as the yield on the 10-year Treasury touched 1.8%.