The market The US stock market had its worst week since the start of the pandemic

Last week was the worst on the US stock exchanges since the beginning of the interest rate pandemic, according to the financial magazine The Wall Street Journal.

The S&P 500 and Nasdaq indices have fallen by the same amount in the last week in March 2020. The S&P index fell 5.7 percent, the Nasdaq 7.6 percent and the Dow Jones index 4.6 percent.

The Nasdaq has been down for four weeks in a row and other indices for three weeks now.

The market has heard predictions last week about the start of a major stock market crash. The general climate is worrying, as inflation in the United States has already accelerated to seven percent.

Although the rise in prices is expected to be at least partly temporary, the central bank Fed is feared to raise interest rates faster than forecast.

Read more: The bursting of the stock exchange’s “super bubble” has already begun, says the investment boss who predicted previous market bubbles

Read more: The stock exchanges in Helsinki and the rest of Europe are in a downward spiral, and the market has a “taste of overwhelming panic” – The share price of these Finnish companies fell sharply on Friday

When as interest rates rise, capital usually begins to shift from equity investments to fixed income markets, lowering stock prices.

Fears of a decline in the value of shares also strengthen sales appetites. Investors seek to anticipate the movements of other investors.

Talks about the market collapse can be compared to the fact that even after falling for weeks, the S&P index is still at the same level as last October. Before the collapse of the corona epidemic, the index was reading 3,350. Friday’s closing reading was about 4,400, more than 30 percent higher.

Before the pandemic, stocks were already in a very long bullish period. The stock market has been supported by an exceptionally loose monetary policy in the United States and Europe that has been going on for more than a decade.

Due to the long-lasting sharp rise in stock prices, a correction is expected.

The most In recent weeks, high-profile technology companies, or loss-making companies, have fallen.

Shares of more profitable and more moderately valued companies have fallen less, which is reflected, for example, in a smaller decline than other indices in the Dow Jones index.

According to the WSJ, many investors believe the Fed will raise interest rates several times this year. The central bank’s choices regarding inflation have sharpened, which is always a carefully considered signal to the market.

Last week, the Fed’s chief executive Jerome Powell called inflation a “serious threat” to economic recovery.

Read more: In the US, inflation is far from the central bank’s target, CEO Jerome Powell promises to do everything possible to curb the rise in prices