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U.S. Stocks Continue To See Substantial Weakness In Afternoon Trading

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After moving sharply lower early in the session, stocks continue to see substantial weakness in afternoon trading on Monday. The major averages are extending the sell-off seen late last week, with the Nasdaq and the S&P 500 tumbling to their lowest intraday levels in over a year.

Currently, the major averages are off their lows of the session but still posting steep losses. The Dow is down 538.30 points or 1.6 percent at 32,361.07, the Nasdaq is down 416.53 points or 3.4 percent at 11,728.13 and the S&P 500 is down 108.34 points or 2.6 percent at 4,015.00.

Significant weakness in overseas markets has carried over onto Wall Street amid concerns about the outlook for the global economy.

Traders seem worried aggressive moves by global central banks to contain inflation could lead to a period of stagflation or an outright recession.

A continued increase in treasury yields is likely to weigh on the markets, with the yield on the benchmark ten-year note once again reaching its highest levels since November 2018.

The extended sell-off on Wall Street also comes as traders look ahead to the release of key inflation data in the coming days.

The latest snapshot of inflation could impact expectations regarding how aggressively the Federal Reserve plans to raise interest rates.

Sector News

Energy stocks continue to turn in some of the market's worst performances in afternoon trading, moving sharply lower along with the price of crude oil. Crude for June delivery is currently plunging $6.05 to $103.72 a barrel.

Reflecting the sell-off in the energy sector, the Philadelphia Oil Service Index is down by 8.5 percent, the NYSE Arca Oil Index is down by 7.1 percent and the NYSE Arca Natural Gas Index is down by 5.8 percent.

Biotechnology stocks have also shown a significant move to the downside on the day, dragging the NYSE Arca Biotechnology Index down by 5 percent to its lowest intraday level in two years.

Substantial weakness also remains visible among airline stocks, with the NYSE Arca Airline Index tumbling by 4.7 percent to a nearly two-month intraday low.

Semiconductor, gold and steel stocks are also seeing considerable weakness, moving notably lower along with most of the other major sectors.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Monday. Japan's Nikkei 225 Index plunged by 2.5 percent, while South Korea's Kospi tumbled by 1.3 percent.

The major European markets also showed significant moves to the downside on the day. While the French CAC 40 Index dove by 2.8 percent, the U.K.'s FTSE 100 Index and the German DAX Index slumped by 2.3 percent and 2.2 percent, respectively.

In the bond market, treasuries have shown a notable turnaround after seeing initial weakness. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 4.4 basis points at 3.079 percent.

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