NEW YORK - U.S. stock markets are on their longest streak of declines in years, with investors facing growing uncertainty reminiscent of the period after Russia's invasion of Ukraine began in 2022. Key Wall Street indexes continued to weaken in late March, with the broader S&P 500 index posting its fifth straight week of declines. According to available data, the S&P 500 has lost around seven per cent since the start of the year, while the tech-heavy Nasdaq has written off nearly ten per cent of its value. The end of the week itself was extremely negative, with the S&P 500 index falling by around 1.7 %, the Nasdaq by more than two per cent and the Dow Jones losing almost 800 points.

The main factor behind the current sell-off is a combination of geopolitical tensions and economic concerns. The markets are reacting primarily to the ongoing conflict in the Middle East, which is driving up oil prices and raising fears of inflation rising again. The price of US crude oil has approached the $100 per barrel mark, putting significant cost pressures on companies and consumers. At the same time, rising energy prices are complicating matters for the US Federal Reserve (Fed).

Investors had been expecting interest rates to fall until recently, but now the market is also considering the possibility of raising them again. Higher interest rates traditionally reduce the attractiveness of equities by making financing more expensive and increasing bond yields. The tensions in the markets are also confirmed by the development of volatility. The VIX index, known as the „fear index“, has climbed to its highest level since 2023, signalling growing investor nervousness. Analysts warn that markets are extremely sensitive to any news about further developments in the conflict or monetary policy. Moreover, the current decline is the longest continuous losing streak in almost four years. According to some estimates, March is headed for the worst monthly performance since 2022, possibly even since the pandemic year of 2020.

Despite the negative developments, however, some analysts remain cautiously optimistic. They expect that the US economy will avoid recession for the time being and the market could stabilise if the geopolitical situation calms down or if there is positive macroeconomic data. Thus, developments on Wall Street currently reflect broader global uncertainty. Investors are watching not only economic indicators, but above all geopolitical factors, which are once again becoming a key driver of financial markets.

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