Wall Street's Losses Worsen

Stocks deepened their losses on Wall Street Monday, sending the S&P 500 to its lowest close in more than a year. The benchmark index is coming off its fifth weekly loss in a row as renewed worries about China’s economy piled on top of markets already battered by rising interest rates. Stocks fell across Europe and much of Asia, as did everything from old-economy crude oil to new-economy bitcoin, the AP reports. The S&P 500 fell 132.10 points, or 3.2%, to 3,991.24. The Dow Jones Industrial Average fell 653.67 points, or 2%, to 32,245.70. The Nasdaq fell 521.41 points, or 4.3%, to 11,623.25.

Monday’s sharp drop leaves the S&P 500, Wall Street’s main measure of health, down roughly 16% from its record set early this year. Most of this year’s damage has been the result of the Federal Reserve’s aggressive flip away from doing everything it can to prop up financial markets and the economy. The moves by design will slow the economy by making it more expensive to borrow. The risk is the Fed could cause a recession if it moves too far or too quickly. In the meantime, higher rates discourage investors from paying very high prices for investments, because investors can get more than before from owning super-safe Treasury bonds instead.

That’s helped cause a roughly 29% tumble for bitcoin since April’s start. The cryptocurrency dropped 10.8% Monday, according to Coindesk. Worries about the world’s second-largest economy added to the gloom Monday. Analysts cited comments over the weekend by a Chinese official warning of a grave situation for jobs as the country hopes to halt the spread of COVID-19. The fear is that China’s strict anti-COVID policies will add more disruptions to worldwide trade and supply chains. Electric automaker Rivian Automotive slumped 20.9% Monday as restrictions that prevented some big investors from selling their shares expired. Uber, which is reportedly cutting back on hiring and costs, fell 11.6%. (More stock market stories.)