The stock market clawed back from a midday drop Friday after coming to the edge of its first bear market since the beginning of the pandemic.

The S&P 500 ended 18.7 percent below the record high it set in early January. A 20 percent decline would have been considered the beginning of a bear market. The benchmark index, the heart of many retirement accounts, came back from a loss of 2.3 percent to end just barely in the green.

So the bulk of the session on Friday, the US market was in bear market territory.

Many sceptics are pointing to the fact that there was options expiring on Friday in the US, and maybe that is one reason why we saw this kind of price action, so don't read too much into it.

The other thing is, and this is just buzz, the buzz is that high-frequency data in the US over the next 5 or 10 days may come in softer and that will kind of make the market believe that the Fed will not have to hike rates very aggressively.

Rising interest rates, high inflation, the war in Ukraine, and a slowdown in China's economy have been worrying investors.

Watch the accompanying video of CNBC-TV18’s Prashant Nair for more details

-With agency inputs

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First Published:May 23, 2022 8:42 AM IST