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As Investors Worry About A Potential Economic Slowdown, The S&P 500 Falls 1%

On Wednesday, stocks fell as investors kept an eye on signs of a possible economic slowdown and kept a close watch on the bond market. The Dow Jones Industrial Average shed 269.24 points, or 0.81%, to close at 32,910.90. The S&P 500 slid 1.08% to finish at 4,115.77, while Nasdaq Composite dropped 0.73% to 12,086.27. Investors have been weighing the results of major companies, as well as signs that economic growth may slow. Credit Suisse’s U.S.-traded shares fell 1% after the bank warned of an adverse profit outlook for the second quarter, citing tighter monetary policy and the war in Ukraine. Intel’s stock dropped more than 5% following an industry conference where management warned of weakening semiconductor demand. The Atlanta Federal Reserve’s GDPNow tracker indicates a growth rate of only 0.9% for the second quarter, down from 1.3% last week. According to the Mortgage Bankers Association, mortgage demand last week fell to its lowest level in 22 years.

Matthew Luzzetti, a chief U.S. economist at Deutsche Bank, stated in a note to clients on Wednesday that the chances of a recession will likely increase in the coming months. “Our main conclusion is that forward-looking recession probabilities are likely to look far more sinister later this year as financial conditions tighten,” Luzzetti wrote. On CNBC’s “Squawk Box,” Allianz chief economic advisor Mohamed El-Erian stated that as the Fed continues to tighten monetary policy, concerns about economic growth and corporate earnings could have a more significant impact on stocks.