The two-year bull market in U. S. stocks, which began at the height of the epidemic panic, nearly fell into a bear market on Friday, but fortunately the last-hour reversal saved it from doom.

The s & p 500 was 20% below its all-time high of 4796.56 for most of the afternoon, but the late counterattack helped recover the lost ground and closed flat. The last time we entered a bear market was in February 2020.

The benchmark stock market index fell for the seventh consecutive week, the longest weekly decline since March 2001, while the Dow Jones Industrial average fell for the eighth consecutive week, the longest losing streak since 1923. The technology-heavy Nasdaq 100 index also fell for the seventh consecutive week, the longest losing streak since 2011.

The key to the rise and fall of the S & P 500 lies in the Fed: it unveiled unprecedented growth measures in early 2020 that helped the S & P 500 more than double by the end of last year; now, as inflation soars, central bankers are withdrawing stimulus measures. Investors who believe a recession is almost inevitable are selling stocks.

"all of this is driven by two big factors that were reiterated this week: how high inflation and its levels are and how aggressively the Fed is likely to control it," said Art Hogan, chief market strategist at National Securities.

Technology stocks are a particular drag on the market.$Apple Inc (AAPL.US) $And$Amazon.Com Inc (AMZN.US) $Fell for the eighth week in a row$Tesla, Inc. (TSLA.US) $Fell for the fourth week in a row. The sector has been under extensive pressure this year. Technology stocks are the most shorted sector in the US market, accounting for nearly 1/5 of all short positions, according to S3 Partners. Among them, software stocks are the most important.

Optional consumer stocks fared worst, down 34% since the s & p 500 hit an all-time high in January. The only sector that has risen this year is energy, up 42% over the same period.

Retail stocks plummeted

Friday's roller coaster ended a tumultuous week, and consumer stocks, which thrived throughout the epidemic bull market, finally plummeted.

$Target Corp (TGT.US) $The biggest drop since Black Monday in 1987$Walmart Inc (WMT.US) $It suffered a similar fate the day before after signs that soaring inflation was hurting US consumers and eroding profit margins.

"the Fed has been the main driver of the market decline, but the latest news from retailers has increased concerns about the economic outlook," said Adam Phillips, managing director of portfolio strategy at EP Wealth Advisors. "now that we have broken the 20% level, the biggest question will be where to go next. "

The S & P 500 has entered a bear market 17 times since 1929, including Friday, according to CFRA Research. The longest one lasts 998 days (September 1929 to June 1932); the shortest one lasts only 33 days (February 19, 2020 to March 23, 2020).

According to CFRA, the bear market has fallen by an average of about 38 per cent, although it has fallen by less than 33 per cent on average since 1946.

"it's bound to happen because I think the bears want to push it over there. And a considerable number of people have become bearish, "said Mike Mullaney, head of global market research at Boston Partners. "the position is catching up with the popularity. "