Unease on Wall Street continued on Tuesday, bringing the stock market to its longest losing streak since February 2020, even as trading in global markets started to calm after days of turmoil in everything from currencies to oil prices.
Trading was volatile. After an early gain, the S&P 500 changed course and ended 0.2 percent lower for the day, its sixth consecutive daily decline and a new low for the year. The last time the S&P 500 recorded a drop for that many days was in February 2020, when investors were shaken at the beginning of the coronavirus pandemic.
The S&P 500 has dropped 6.5 percent over the past six trading days. Market sentiment has turned sharply since a summer rally lifted the index some 17 percent from a June low, as investors have faced up to the idea that central banks around the world won’t slow down their campaign to raise interest rates to combat inflation, even if that threatens the economy.
The hard line from central bankers, who are trying to control the price increases that are running at their fastest pace in decades, has analysts predicting that a recession is more likely for the United States, Britain and continental Europe.
“It’s looking very clear now that the major central banks are not going to blink in bringing down inflation at the cost of growth,” said Rob Subbaraman, head of global macro research at Nomura. “I’m more worried about Europe than the U.S. in terms of the depth of the recession.”
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Several central banks, including the Federal Reserve and the Bank of England, raised rates last week, with more increases in store.
On Tuesday, Charles Evans, the president of the Federal Reserve Bank of Chicago, said in a speech that “we will need to raise rates further and then to hold that stance for a while” to tame inflation.
Stock trading in Europe and Asia was steadier than in recent days, but some major benchmarks still ended slightly lower. The pan-European Stoxx 600 index fell 0.13 percent, while in Asia, Japan’s Nikkei climbed 0.5 percent and South Korea’s Kospi composite index gained 0.1 percent.
The Shanghai composite index rose more than 1 percent. Reuters reported that Chinese market regulators had asked brokers to help stabilize domestic stock markets ahead of an important Communist Party congress next month.
In Britain, the center of financial turmoil in recent days, the FTSE 100 dropped about half a percent, while the British pound climbed to $1.072, a day after touching a low point against the dollar. Investors there have been rattled by the government’s announcement on Friday of a sweeping plan to cut taxes and increase borrowing.
Raphael Bostic, the president of the Federal Reserve Bank of Atlanta, said on Monday that the severe market reaction to the British government’s proposals reflected a fear that the “new actions will add uncertainty to the economy.”
In the United States, “the key question will be, what does this mean for ultimately weakening the European economy, which is an important consideration for how the U.S. economy is going to perform,” Mr. Bostic said in an interview at a Washington Post event.
When asked whether the instability emanating from Britain increased the chance of a global recession, Mr. Bostic said, “I think it doesn’t help it.”
Oil prices regained some lost ground on Tuesday, with the price of West Texas Intermediate crude, the U.S. benchmark, rising 2.3 percent, to about $78.50 a barrel. The gains came as some oil producers in the Gulf of Mexico, including Chevron and BP, said they would evacuate some staff from oil platforms as Hurricane Ian made its way toward Florida.
On Friday, oil prices had dropped below $80 a barrel for the first time since January.
Jeanna Smialek and Joe Rennison contributed reporting.
