Most investors recognize this year's sweeping sell-off has been led by the same growth stocks that soared last year. It's not just growth stocks, however, that are losing ground here. The blue-chip-laden Dow Jones Industrial Average (^DJI -0.69%) now sits nearly 17% below January's high, losing almost 7% of its value in June alone. Of course, this means that roughly half the Dow's constituents lost even more ground last month.

And it's these names in particular -- June's worst performers -- that merit a closer look now. Have these names been errantly sold off because the market itself is in a free fall? Or are investors legitimately concerned about these companies' foreseeable future?

If it's the former, feel free to "buy on the dip." If it's the latter, you may want to keep your investing powder dry, since there's something bigger-picture going on.

What went wrong in June

Cutting straight to the chase: Last month's biggest Dow losers are chemical company Dow (DOW 0.86%), credit card giant American Express (AXP 0.09%), and industrial giant Caterpillar (CAT 0.86%), falling 24%, 18%, and 17%, respectively.

Don't look for a specific reason shares of chemical company Dow tumbled in June. You won't find one. Rather, just know that this sell-off is part of a wider one working against most commodities and related stocks. The Dow Jones Commodity Index is now 12% below its early June high, based on growing fears that the Federal Reserve's aggressive rate-hike plans will not only stifle the inflation that's lifted all materials prices but could also start a recession that undermines demand for any and all materials.

That's ultimately the same sweeping reason American Express shares lost so much ground in June as well. With the potential for a full-blown, consumerism-crimping recession on the horizon, a service that only facilitates spending isn't well-positioned for such an environment. Sky-high credit card interest rates (despite near-record-low rates on all other fronts) do nothing but help keep consumers from charging for goods and services.

Finally, add Caterpillar to the list of last month's biggest Dow losers, again for the same broad reason. That is, although the future for the construction market looked bright a year ago, it's turned considerably dimmer in just the past few weeks. Earlier this month, the U.S. Census Bureau announced the country's annualized pace of construction spending in May fell slightly from April's level, with planned expenditures on larger projects that typically require heavy equipment falling even more than spending on smaller projects like single homes. Although we've seen monthly lulls a few times since early 2020, those prior instances are linked to pandemic-related logistics hurdles. This slowdown may well be rooted in fading demand.

The question remains: Are any of all of these stocks buys following last month's sizable setbacks?

Answer: No, although not just for the reason you might think.

Take the hint

As veteran investors (and longtime Motley Fool readers) will attest, stepping into a stock just because it's been beaten down isn't enough of a reason to buy a stock. That stock still has to be worth owning, and it still has to be worth the price you're paying. One calendar month's selling isn't enough of a reason in and of itself to jump in; that's never not been the case.

There's something else to consider this time around though. That is, these steep sell-offs are a red flag of much bigger market-wide trouble that can't be chalked up to a little unfortunate bearish volatility.

Think about it. Of all three losses detailed above (not to mention the Dow Jones Industrial Average's setback as well), economic weakness is the key driving force. This isn't the sort of news-driven weakness that's quickly shrugged off. This is well reasoned and calculated selling, ultimately rooted in investors' assessment of the foreseeable future. They don't like what they see. And who could blame them? It's increasingly looking like the Federal Reserve has little choice but to wage an outright war against inflation. It's creating massive collateral damage as a result. Perhaps worse, there's no assurance the Fed's efforts will actually curb the inflation it's meant to curb anytime soon.

Then there's the other headwind -- the calendar. Summer is typically a slow time for stocks anyway and can be decidedly bearish once a bear market has materialized.

Uncertainty can be big trouble

None of this is to suggest American Express, Dow, and Caterpillar are forever doomed. All three are fine companies, and all three of these stocks will climb again. Indeed, each one may be closer to a bottom than not. It's not inconceivable, in fact, that all three tickers could be priced much higher just a few months from now (provided the broad market's tide takes a turn for the better as well).

It's also not to suggest that a calendar should be a major consideration when it comes to buying and selling stocks.

Rather, this is simply to say nobody should ever be in a hurry to step into stocks solely because they've been sold off a little too much, too quickly -- there's always more to the story. In this case, the "more" is the fact that we just don't know how well the economy can absorb inflation and the interest rate increases it's driving. All we know is, whatever's in the cards, none of it is good news for the construction, consumerism, and commodity chemicals markets. It could take months for these businesses to move out from underneath this cloud of uncertainty. Most of these tickers are best left avoided until then, at least.