The Market Is Melting Down and People Are Feeling It. ‘My Stomach Is Churning All Day’

“These individuals weren’t in a superb place,” mentioned Mr. Jones, 43. “They’d lots of anxiousness about targets and goals and with the ability to dwell their existence.”

Shares, bonds and different property are getting hammered this yr as traders wrestle anew with the likelihood that the U.S. is headed towards recession. On Friday, the Dow Jones Industrial Common recorded its eighth straight week of declines, its longest such streak since 1932. The S&P 500 flirted with bear-market territory.

Households are watching the investments they meant for down funds or faculty tuition or retirement shrink, day after day. They’ve seen huge retailers like

Walmart

and Goal report their steepest inventory drops in a long time this week, after earnings that signaled an finish to the pandemic spending increase.

The market turmoil has scared company chieftains away from taking their corporations public. In Silicon Valley, goals of multibillion-dollar valuations have been changed by the fact of layoffs and recoiling traders.

Inventory costs have been harm by forces that seem in practically each cycle, similar to rising rates of interest and slowing development. There are additionally idiosyncratic ones, together with the speedy return of inflation after a long time at a low ebb, a wobbling Chinese language economic system and a warfare in Ukraine that has shocked commodity markets.

The Federal Reserve has raised rates of interest twice this yr and plans to maintain doing so to curb inflation, however that makes traders fear it should gradual the economic system too quick or by an excessive amount of.

To traders it may well really feel there is no such thing as a protected place. Whereas the overwhelming majority of particular person traders are holding regular, that’s partially as a result of customary alternate options don’t supply a lot aid. Bonds, usually a haven when shares are falling, have additionally been pummeled. The cryptocurrency market, pitched as a counterweight to conventional shares, is sinking.

For

Michael Hwang,

a 23-year-old auditor in San Francisco, the market’s tumble means he may wind up taking out loans to get an M.B.A. He has been hoping to pay his tuition out of pocket when he ultimately goes again to high school.

For

Arthur McCaffrey,

an 80-year-old retired analysis scientist from Boston, it means questioning if he’ll dwell to see his investments recuperate.

Rick Rieder,

the top of mounted revenue at large asset supervisor

BlackRock Inc.,

likened the state of monetary markets to a Class 5 hurricane. The veteran bond dealer has been within the enterprise for 3 a long time and mentioned the speedy value swings are in contrast to something he has seen.

“My abdomen is churning all day,” he mentioned. “There are such a lot of crosscurrents of uncertainty, and we aren’t going to get closure on any of them for weeks, if not months.”

Buyers are used to the Fed stepping in to calm markets, however lots of the dynamics rattling shares, bonds, currencies and commodities are out of the central financial institution’s management, mentioned Mr. Rieder: “The Fed can’t remedy the provision scarcity of corn or fertilizers, or the lack to get pure fuel into Europe. They will’t construct a ample stock of houses.”

The plunge is a U-turn from shares’ runup in 2020 and 2021. Then, unusually low rates of interest and a surging cash provide—byproducts of the federal government’s efforts to stave off a downturn—pushed inventory indexes to repeated new highs. Some traders say the decline was lengthy overdue and, now that it has arrived, may very well be tough to restore.

Melissa Firestone,

a 44-year-old economist specializing within the vitality market, bought lots of her particular person shares and purchased a fund that shorts the S&P 500, betting on a drop. “The Fed goes too far, inflation is a nightmare and the real-estate market goes to crash,” she mentioned.

Keith Yocum,

a novelist and retired publishing government who’s 70, moved a 3rd of his financial savings into money-market funds final yr. Mr. Yocum doesn’t love conserving a lot cash in money, particularly with inflation eroding its worth, however sees few higher choices.

In October, when inventory costs had been nonetheless hitting information,

Craig Bartels

moved most of his 401(ok) and particular person retirement account financial savings into money-market funds. Quickly, he bought his cryptocurrency holdings and began shorting homebuilding shares and

Tesla Inc.

by a brokerage account.

A 46-year-old real-estate dealer in Zionsville, Ind., Mr. Bartels had seemed to the distant previous for recommendation, studying

Ray Dalio’s

latest ebook on financial historical past and Adrian Goldsworthy’s “How Rome Fell: Loss of life of a Superpower.”

“This appears like us proper now,” he thought.

His 20-year-old son, a school pupil, had instructed him he was buying and selling a number of thousand {dollars} by a

Robinhood

account. To Mr. Bartels, it seemed like one other signal of a coming reckoning.

A era earlier, he was a day-trading faculty pupil himself. He did effectively, he mentioned, however knew many who had been “throwing cash at web shares and had no concept what they had been doing.” The dot-com bubble of the late Nineteen Nineties quickly popped. At this time, Mr. Bartels is glad he modified course when he did. “I don’t assume we’re wherever close to the underside,” he mentioned.

Don McLeod,

a former analysis supervisor at a Manhattan regulation agency, retired 4 years in the past when the markets had been sturdy. He checked his 401(ok) account nearly each day with glee.

When shares began to show in January, he continued checking day by day out of concern, till the losses turned too steep. By early Could, his retirement accounts had fallen 25% in 5 months.

Mr. McLeod hopes the U.S. isn’t headed for a repeat of the “stagflation” of the Nineteen Seventies. “While you’re banking on that cash saved over your lifetime to hold you thru and it begins to go away, you’re feeling helpless,” he mentioned. “I don’t wish to return to work at 66.”

Susan Wagner,

a latest retiree who moved from Chicago to New Mexico’s Rio Rancho along with her spouse in 2020, took their retirement cash out of the markets altogether this month.

“The anxiousness was actually me shedding sleep, tossing and turning at evening questioning how far more we had been going to lose,” Ms. Wagner mentioned. Her spouse, a former radiologist, was hesitant however ultimately agreed. “It was too nerve-racking, and I used to be fairly emotional about it,” Ms. Wagner mentioned. “I used to be very upset by what was taking place.”

Jim Cahn,

chief funding officer of Wealth Enhancement Group in Minneapolis, mentioned his shoppers are extra nervous now than in 2008, the yr of the monetary disaster. The query he’s getting: “The place can I am going to cease getting poorer?”

The agency held webinars for shoppers available in the market’s frothiest days final yr, warning in opposition to loading up on tech shares and highflying pandemic names similar to Peloton, Mr. Cahn mentioned. Recently the webinars have a special theme: Don’t panic.

The agency is taking a look at commodities, which have a tendency to guard in opposition to inflation and are getting a lift from the warfare in Ukraine, and municipal bonds, which Mr. Cahn mentioned are beginning to look enticing.

Expertise shares that soared in recent times, like

Fb

mum or dad

Meta Platforms Inc.

and

Netflix Inc.,

have been hit particularly onerous. Dismaying outcomes or darkening outlooks have cratered tech shares and, at painful moments, helped pull down the broader market.

There have been so many unhealthy days they’ve began to blur collectively, mentioned

Sonu Kalra,

portfolio supervisor of Constancy Investments’s Blue Chip Progress Fund.

Mr. Kalra was sitting in his suburban Boston house workplace in early February when Meta shocked Wall Avenue with disappointing earnings. As he watched its shares slide in after-hours buying and selling, he felt offended at himself for failing to heed earlier warning indicators.

“You’re feeling lots of ache and begin questioning: ‘What may I’ve achieved otherwise?’ ” he mentioned. “However you may’t cry over spilled milk. You must transfer ahead.”

On the time, he thought Meta’s points had been idiosyncratic and never an indication of a broad withdrawal from development shares. That got here later, when Russia’s invasion of Ukraine despatched vitality costs increased. “Oil permeates all the pieces,” he mentioned.

On Wednesday,

Cole Smead,

a portfolio supervisor at Smead Capital Administration Inc., awakened early in Phoenix. Goal, whose inventory makes up about 5% of the Smead Worth Fund, was set to report earnings. Goal inventory was down double digits in premarket buying and selling. Mr. Smead placed on a swimsuit and headed in to his workplace.

That morning, Goal hovered at 25% beneath Tuesday’s shut. Mr. Smead determined it wasn’t productive to stare at a display and watch his fifth-largest place in freefall. He picked up a ebook, the biography of George Hearst, the silver miner father of William Randolph Hearst.

“I figured he’ll most likely educate me greater than the markets will educate me that day,” he mentioned.

Typical investing knowledge says that over time, inventory markets go up. Numerous traders watched their financial savings develop by staying put in a market that rose sharply within the decade after the monetary disaster. Those that held tight when the market crashed in early 2020 had been rewarded when shares resumed their upward climb inside weeks.

To some market gamers, this yr’s decline feels completely different. The federal government’s extraordinary stimulus measures that pushed the economic system right into a V-shaped restoration in 2020 have largely run out, changed by insurance policies aimed toward controlling inflation. Whereas the controversy about whether or not a recession is on the way in which is way from settled, there may be broad consensus the U.S. has entered a interval of slower development.

Mr. McCaffrey, the 80-year-old retired analysis scientist, has been shopping for

Apple

shares in latest weeks, automating the purchases for when the worth is beneath a sure stage. However total, watching shares of his favored tech corporations erode has been a dark expertise. Apple is down 23% thus far this yr.

“It’s getting worse for individuals in my age group,” Mr. McCaffrey mentioned, “just because we don’t have time to attend for it to return again.”

It takes quite a bit to shake

Kevin Landis,

a fund supervisor whose tech-focused fund was battered by the tech wreckage of the early 2000s. However when Netflix introduced disappointing quarterly outcomes in April, Mr. Landis, sitting in his house workplace overlooking his tranquil suburban San Jose yard, felt as if he’d been hit by an earthquake.

Mr. Landis had motive to be involved:

Roku,

one other streaming firm, made up 14% of his tech fund on the finish of March. He says he hasn’t bought any shares, despite the fact that Roku’s inventory has sunk by practically 60% this yr.

“Most likely the defining distinction this time is final time I may simply storm out of the workplace and go house,” he mentioned. “This time, I’m working from house. So there’s no escaping it.”

—Angel Au-Yeung, Hardika Singh, Julia-Ambra Verlaine, Corrie Driebusch, Orla McCaffrey, Matt Grossman, Heather Gillers, Liz Hoffman, Charley Grant, Akane Otani and Veronica Dagher contributed to this text.

Write to Justin Baer at justin.baer@wsj.com