Wall Street tumbles into bear market territory as inflation, costs soar

TAMPA, Fla. - A steep selloff on Wall Street Monday sent the Dow Jones Industrial Average tumbling more than 1,000 points before settling with a loss of more than 874, or 2.8%.

The Nasdaq Composite fell 4.7% and the S&P 500, the broadest measure of stocks, lost 3.8%, officially closing in a bear market.

"Things are unfortunately on a downward trend, and I think things are going to be heading that way for a while," said Michael Snipes, a University of South Florida economics professor.

Snipes explained the stock selloff is largely happening because investors are concerned the Federal Reserve is going to continue raising interest rates as a possible way to slow inflation, which hit a 40-year high last week.

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"The whole idea behind increasing interest rates is to encourage people to save money and not to spend it," Snipes said. "The whole rationale there is that, well, if we're spending less money, then that's something that can kind of cool the economy, maybe try and bring prices back down."

Snipes believes the safest place for investments right now are in bonds and metals. The trade-off for minimizing risk, however, re-lower returns.

He added that long-tern investors should resist the urge to panic, even if their stocks and retirement funds take a hit.

"Any small change can have a huge overall impact on the entire economy, so what I say is just kind of plan for the worst," Snipes said, adding the market will bounce back – it's just a matter of when.

Snipes said it also seems likely the economy is headed toward a recession, or may even be in the beginnings of one right now.