S&P 500 and MSCI have biggest first-half drop since 1970

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S&P 500 and MSCI have biggest first-half drop since 1970

The US benchmark S&P 500 had its biggest drop in the first six months since 1970, and the MSCI global stock index had its biggest first-half of a year drop on Thursday.

There have been concerns over the Ukraine-Russia war, soaring inflation, higher interest rates and a possible US recession.

The yield on the benchmark Treasury note is up about 150 basis points year-to-date, the largest first-half increase since the first six months of 1994.

A Commerce Department report showed US consumer spending rose less than expected in May, adding to jitters Thursday. The report suggested inflation had probably peaked, but price pressures were still strong enough to leave the US Federal ReserveFederal Reserve on its aggressive policy tightening path.

Inflation is something we don't have to worry about anymore. Sam Stovall, the chief investment strategist at CFRA in New York, said it is expected to be with us for a long time.

The central bank chiefs from the European Central Bank, the Bank of England and the Fed met in Portugal this week and expressed their renewed commitment to control inflation no matter what pain it caused.

The Dow Jones Industrial Average fell 253.88 points, or 0.82%, to 30,775. The S&P 500 lost 33.45 points, or 0.88%, to 3,785. 38 and the Nasdaq Composite dropped by 149.16 points, or 1.33%, to 11,028. The S&P 500 has lost 20.6% since the beginning of the year.

The Pan-European STOXX 600 index lost 1.5% and the MSCI's gauge of stocks fell 1.12%.

The MSCI global stock index was down 20.9% for the first half of 2022.

The Fed's hawkishness and investor desire for liquidity in difficult times have helped support the US dollar.

The US dollar index gained 6.5% for the quarter, its biggest quarterly jump since the last quarter of 2016 with a 6.5% increase in the last quarter. The index is up 9.4% for the year to date.

The dollar index fell by 0.343% on Thursday, with the euro down 0.01% to $1.0481.

Treasury yields fell for a third day on Thursday as investors worried about a possible US recession. The yield on 10 year Treasury notes fell 10.4 basis points to 2.989%, as safe-haven buying at the long end pushed prices up and yields lower.

Oil prices fell by 3% on the day. OPEC said it would only increase output as much as previously announced, but left investors wondering about future output.

Brent crude LCOc 2 futures for September delivery fell $3.42, or 3%, to settle at $109.03 per barrel. The August LCOc 1 contract, which ends on Thursday, fell $1.45, or 1.3%, to settle at $114.81 a barrel. The US crude CLc 1 futures fell $4.02, or 3.7%, to close at $105.76.