NEW YORK (AP) – Shares fell during trading on Wall Street on Thursday and on their way to ending their worst quarter since the early days of the pandemic.

The S&P 500 was down 0.3% as of 1:40 p.m. in the east, although it had previously fallen 2.1% in trading. The benchmark was on the sad lane that dragged it in bear market earlier this month and has now fallen by 20% for the year. It is close to closing its worst quarter since early 2020.

The Dow Jones Industrial Average fell 113 points, or 0.4%, to 30,912, while the Nasdaq fell 0.5%. Shares of small companies also fell in price. Russell 2000 lost 0.1%.

The yield of a 10-year treasury that helps set mortgage rates, fell to 2.98% from 3.09% on Wednesday late.

Retailers and other companies that rely directly on consumer spending have suffered some of the biggest losses, as they have all year. Amazon was down 2.4% and Best Buy was down 2%.

Rising inflation has been the cause of much of the fall in the broader market this year as businesses raise prices on everything from food to clothing and consumers are pressed harder. Inflation remains stubbornly hot, according to some recent economic data. Federal Reserve and others central banks are actively raising interest rates try to slow economic growth to cool inflation.

“The market is trying to assess when it seems that the Fed will get what it needs to make sure inflation goes to the plateau,” said Quincy Crosby, chief equity strategist at LPL Financial.

A measure of inflation that is closely monitored by the Fed in May increased by 6.3%. compared to the year before, has not changed compared to the April level. A report by the Ministry of Commerce on Thursday also said that consumer spending from April to May grew slowly by 0.2%.

The update follows from an alarming report earlier this week that shows this consumer confidence has declined to its lowest level in 16 months. The government also reported that The U.S. economy contracted 1.6% in the first quarter and weak consumer spending were a key part of this reduction.

Investors are worried about this The US could slide into recession as inflation harms businesses and consumers. The main concern is the rise in Fed interest rates, which could slow economic growth too much and actually lead to a recession.

The situation has been complicated by additional supply chain problems Blocking COVID-19 in China and Russia’s invasion of Ukraine. The war in Ukraine has led to rising oil prices this year record high gasoline prices. The OPEC oil cartel and allied countries decided on Thursday to increase crude oil production, but that amount is unlikely to do much to reduce high gasoline prices and inflation, which is hitting the global economy.

U.S. crude oil prices fell 2.8%, but still rose 42% in 2022.

“Undoubtedly, these have been a difficult two quarters for the market, the U.S. economy, the U.S. consumer, and for the Fed’s work to control and reduce inflationary pressures,” Crosby said. “And yet, as we enter the beginning of the second half, the companies are still in control, and it is the recommendations they offer that will help set the tone for the next few weeks.”

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