The stock market has been suffering a massive sell-off of late due to concerns over several macroeconomic and geopolitical developments. The probability of the Fed raising interest rates aggressively later this year to tame the surging inflation, which accelerated 8.3% in April, has pushed the stock market down. Furthermore, the consequences of the Ukraine-Russia war and extended COVID-19 lockdowns in China have added to concerns. These factors, along with a negative GDP rate in the first quarter, could mean the nation's economy is heading into a recession.
The S&P 500 has declined 13.3% through April, marking its steepest fall in the first four months of a year since 1939. The Nasdaq Composite and Dow Jones Industrial Average have plunged 25.5% and 12.7%, respectively, so far this year. Because the market is expected to stay under pressure in the near term, we think investing in large-cap companies may help avoid short-term swings. Their larger market reach and pricing power enable them to perform steadily regardless of market fluctuations.
