The S&P 500 index has dropped below the 5,000 mark, hitting a two-month low and recording its worst monthly performance since December 2022. The index, tracked by the SPDR S&P 500 ETF Trust (NYSE:SPY), has been in the red for the last six sessions, facing its worst losing streak since September 2022. Prices have also slipped below the 50-day moving average, signaling potential further downturns.
As of the market close last Friday, the S&P 500 was down 5.5% from its recent peak but remains up year-to-date and above its 2021 high. Experts predict that the index could retest the 4,800 level, with a possibility of further declines towards the 200-day moving average at around 4,700. This week could see the sell-off trend continue, but a drop in the March Personal Consumption Expenditure (PCE) inflation rate on Friday could lead to a market rally.
Historically, market downturns are common, with the S&P 500 experiencing an average drawdown of 14% per calendar year since 1990. Despite this, the index has returned over 11% annually over the past half-century, emphasizing the importance of long-term investment. Remember, it’s about time in the market, not timing the market.