Stock market ended the quarter on a tumultuous note, making September the worst month since March 2020. Stock prices retreated from record highs. Large, fast-growing companies had their worst month since the pandemic-triggered March 2020 drop. Treasury yields are at their highest level since June.
After a choppy session, all three major U.S. indexes ended lower Thursday. Early in the day, stocks rose, then faltered and turned negative, and losses accelerated in the final minutes of trading.
A range of companies, including machinery giant Caterpillar and home improvement retailer Home Depot, all lost points, pulling down the economy-sensitive Dow Jones Industrial Average by 546.80 points, or 1.6 percent.
The S&P 500 fell 51.92 points, or 1.2 percent, to 4307.54. The Nasdaq Composite dropped 63.86 points, or 0.4%, to 14448.58. The quarter ended with a less optimistic tone than investors had hoped.
An unpredictable environment
Many fund managers reported feeling nervous heading into the last months of the year. This year’s rise in inflation was supposed to be a short-term phenomenon, but central bankers are unsure how long it will last.
Strategists who predicted the economy would grow again during the third quarter are cutting their estimates due to supply chain bottlenecks and the highly contagious Delta variant of Covid-19. Economic data also didn’t live up to expectations.
Citigroup’s economic surprise index, which measures the extent to which U.S. reports beat or missed estimates, declined this month to its lowest level since June 2020. In the end, the S&P 500 is still up 15% this year and has picked up a sixth consecutive quarter of gains.
The index is now just a few percentage points shy of its record close from early September. Nevertheless, the stock market also had its worst month since March 2020, with the S&P 500 Index falling 4.8%.