The S&P 500 entered into bear market territory on Friday (May 20) as stocks continued to tumble. Since reaching a record high of 4,796 in January, the S&P has lost over 20% of its value, joining the Nasdaq in bear market territory.
A late rally prevented the S&P 500 from closing in bear market terrority with a gain of just 0.58 points to finish at 3,901. The rally also propelled the Dow Jones Industrial Average to a gain of 8.77 points, closing the day at 31,261. The Nasdaq finished the day in red, down 33 points to close at 11,354.
The downturn is caused by investors' concerns over rising inflation and weak quarterly earnings reports from several companies.
"This week's decline felt as if the market was starting to recognize that earnings growth and S&P 500 profitability may be in jeopardy as inflation will continue to be higher throughout the year," David Wagner, portfolio manager at Aptus Capital Advisors, wrote in a note to investors.