US Stocks Plunges as Recession Impends

As fears about a recession rose Monday, the U.S. stock market fell sharply during Wall Street's afternoon trade, further lowering major indexes. As of 3:24 P.M. Eastern, the S&P 500 had dropped 0.7%. The Nasdaq sank 0.1%, and the Dow Jones Industrial Average plummeted 270 points, or 0.9%, to end at 29,314 today, the Associated Press reported.

Meanwhile, investors continued to sell British government bonds as they refused the significant tax cut proposal that came out of London last week, causing the British pound to drop to its lowest level ever versus the dollar.

Additionally, the majority of European markets fell, too. France, which has the second-largest economy in the EU, expects growth to slow down a lot next year.

The crisis in Ukraine is pushing up the price of gas and food, restraining the spending power of consumers, said the head of the European Central Bank, who claimed that the economic outlook is "darkening."

U.S. Stocks Keep on Dropping

Stock market indexes in the U.S. have been slipping down, having their fifth loss in just six weeks.

"Yields are higher, the dollar is stronger, and stocks are weak," according to an investment strategist at All Star Charts, Willie Delwiche.

He also added that this has been the main theme for most of the year. It got a little stronger last week, and it's still going on this week, as reported by the Los Angeles Times.

The S&P 500 dropped 38.19 points, closing at 3,665.04. The Nasdaq fell 65 points, ending up at 10,802.92. The Dow ended the day at 29,260.81, down 329.60 points. It is now 20.5% lower than its all-time high on January 4. A drop of 20% or more from a recent peak is called a "bear market."

Banks, healthcare organizations, and energy stock losses were among the many losses reported. Medtronic declined 1.6%, Marathon Oil was down 3.7%, and Bank of America sank 2.2%.

Furthermore, stocks of smaller companies decreased more than the overall market. To close at 1,655.88, the Russell 2000 lost 23.71 points or 1.4%.

On the other hand, following news that travel restrictions will be relaxed in November for the gaming hub of Macao, casino and resort businesses were a bright spot. Wynn Resorts had a 12% rise.

The U.S. Might Face Another Recession

Meanwhile, the brutal truth is creeping in that a recession is inevitable if the markets and economy are to survive the Federal Reserve's vigorous war against inflation. The only remaining issue is how terrible it becomes, according to U.S. News.

Federal Reserve Chairman Jerome Powell also agreed with this last week when he announced that the central bank would be raising interest rates for the third time in a row by 75 basis points. This is what the Fed has been doing to fight high inflation.

"No one knows whether this process will lead to a recession or, if so, how significant that recession would be," Powell stated following the announcement.

He also stated that it will depend on how rapidly pressures on wage and price inflation subside if expectations stay anchored and whether we see an increase in labor supply.

This article is owned by Latin Post.

Written by: Bert Hoover

Watch: Stocks slump as UK unveils debt-financed tax cut - From CNBC Television