The S&P 500 fell deeper into a bear market on Tuesday after notching a new 2022 low. The broader market index slid to 3,623.29 during the session, which broke below the June intraday low of 3,636.
Stocks initially got a boost after Chicago Federal Reserve President Charles Evans signaled some apprehension about the central bank raising rates too quickly to fight inflation. The Dow Jones Industrial Average surged nearly 400 points at its session highs — before erasing those gains and closing down by about 125 points.
But then the rally fizzled out as the yield on the benchmark 10-year Treasury note approached a key 4% level that it hasn't touched since 2010.
"The fact that we lost support at both 3900, 3800 and certainly made a beeline to the June lows tells you that the risk-off environment hasn't changed much over the course of the last six weeks," said Art Hogan, chief market strategist at B. Riley Financial.
"We're still concerned that the Fed is going to overdo it and push the economy into recession," Hogan added.
Still, there are buying opportunities as markets continue to tumble, according to BMO Capital Markets. The firm said 66% of S&P 500 stocks are trading below their historical forward price-to-earnings multiples, compared to 40% at the end of 2021.
"We believe it is also important to note that while there is still plenty of uncertainty in the market, there is now also plenty of value beneath the surface for investors focused on stock picking," BMO's Brian G. Belski wrote in a Monday note.
The strategist indicated that the energy and communication sectors offer plenty of value picks for investors, while utilities stocks are more expensive.
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