Dow Closes 1,164 Points Down in Biggest Fall Since 2020

© AP Photo / Richard DrewTrader Peter Tuchman works on the floor of the New York Stock Exchange, Friday, Dec. 28, 2018.
Trader Peter Tuchman works on the floor of the New York Stock Exchange, Friday, Dec. 28, 2018.  - Sputnik International, 1920, 18.05.2022
US stocks closed on Wednesday with their biggest loss in nearly two years. The crash comes amid fears the US economy could "overheat" this summer.
The Dow Jones Industrial Average (DJIA) closed on Wednesday after losing 1,164.52 points, a 3.57% loss that took it to 31,490.07. The S&P 500 also fell dramatically, losing 165.17 points to close at 3,923.68 - a 4.04% loss. The Nasdaq Composite, an index heavily influenced by the information technology sector, suffered the worst loss of all: it lost 4.73% of its value, dropping 566.37 points to finish at 11,418.15.
The last time the New York Stock Exchange saw such a dramatic loss was in June 2020, although the Dow suffered a 1,063-point loss on May 4 and the Nasdaq had been slipping for some time.

According to CNBC, the massive selloffs were triggered by twin reports from retail giants Target and Walmart, both of which reported on Wednesday that their sales had suffered in the first quarter - a likely consequence of rising inflation. Target stocks lost 27% of their value on Wednesday and Walmart stocks 11%, while other retailers were similarly affected, such as Best Buy, Dollar Tree, Dollar General, Amazon, Macy's, Kohl's and Lowe's.

Earlier this month, the US Federal Reserve took more drastic action to curb the depreciating value of the US dollar, introducing its largest interest rate increase in 22 years and signaling that several more increases were on the way. The inflation is being caused by a number of factors, including increased manufacturing and shipping costs associated with pandemic lockdowns, speculation by retailers, and rising fuel costs partially attributable to a US boycott of Russian petroleum products.
Ratings agencies like Fitch and Moody’s have warned that while the US economy will likely complete its job recovery from the losses created by the lockdowns at the beginning of the COVID-19 pandemic in March 2020, the combination of worker shortages, rising wages, and inflation could produce a "wage-price spiral" that will wreck the US economy.
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