Wall Street closed mostly lower on Tuesdayafter a day of falling into a bear market due to concern about high prices inflation Pushing central banks to slow the economy too much.
The Standard & Poor’s 500 It was down 0.4% after another shaky trading day. Investors are preparing to see the magnitude of the interest rate hike benefit To be released by the Federal Reserve on Wednesday.
Profits of many major technology companies, such as inspirationhelp the compound index of Nasdaq It rose 0.2%. Industry Index daw Jones decreased 0.5%. Treasury yields rose again, reaching their highest levels in more than a decade.
however, The market traded quieter than during the global recession on Monday, sending the S&P 500 Index down 3.9 percent. Shares fell more than 1% in Tokyo s Parisbut they went up in the same thing Shanghai. Wall Street investor nervousness has eased, even as Treasury yields are back at their highest levels in more than a decade.
“No one will take important positions today before what could be a very difficult day.” With the Fed’s announcement, Katie Nixon, chief investment officer at Northern Trust Wealth Management said.
prices Cryptocurrency They kept swinging. They have been among the hardest hit in this year’s sell-off of the markets, as the Federal Reserve and other central banks raised interest rates to rein in inflation and aggressively closed the “easy situation” that had helped prop up markets… for years. The Bitcoin It was down 4.3% in the afternoon at $2,207, according to CoinDesk. Overnight it is down nearly 70% from its record high of $68,990.90 late last year.
A report showed that inflation at the wholesale level was slightly lower than expected in May, although still very high, provided some support to the market. According to Jack Applin, chief investment officer at Cresset Capital Management, that could be a sign that wholesale inflation peaked in March.
But economists said the data won’t prevent the Fed from raising its key interest rate on Wednesday by A larger amount than usual. Investors are now expecting the biggest increase since then 1994to rise Three-quarters of a percentage point, or three times the usual rate.
A week ago, this increase was considered a long shot, if that happens. But Friday’s report on consumer price inflation, which has hit the market, appears to have forced the Federal Reserve to be more aggressive. The report showed that CPI inflation worsened in May, rather than slowing as expected.
“The market decision is divided over whether it will be a good or bad thingNixon said about raising the interest rate dramatically. “It certainly opens the door to other great heights in the future.”
Treasury yields continued to rise, with the two-year yield touching its highest level since November 2007, before the financial crisis, according to Tradeweb. The 10-year yield hit its highest intraday level since April 2011.
A relatively reliable warning sign of a recession continued to emerge in the bond market. In afternoon trade, the 10-year Treasury yield rose above the two-year yield again, to 3.49% from 3.43%. This is how things tend to be in the bond market.
In the rare circumstances where a two-year yield outperforms a 10-year yield, some investors see it as a sign that a recession could come in a year or two. It’s what’s called an “inverted yield curve,” and it’s blinking on and off for the past day.
“The real calm in the market today is very much driven by interest in the Fed’s decision this week.”said Greg Pasock, CEO of AXS Investments. “Today is either the calm before the storm or the calm that we hope will represent a long period of calm.”
Other central banks around the world, including Bank of Englandrates also rose, while European Central Bank He said he will do so next month and in September.
The war in Ukraine caused a sharp rise in oil prices And the foodsfueling inflation and reducing consumer spending, especially in Europe. On the other hand, infections Corona virus disease in China They have imposed some harsh and slowing business restrictions, which threaten to slow the world’s second largest economy and exacerbate stranded supply chains.
The move by central banks, especially the Federal Reserve, toward higher interest rates has reversed the staggering rise in stock prices spurred by massive support for markets after the pandemic arrived in early 2020. The S&P 500 has more than doubled from the end of March 2020 to its highest level in January. This was the shortest bull market on record since 1929, which followed the shortest bear market ever, according to the S&P Dow Jones Indices.
(with information from AP)