Wall Street’s major indexes started lower on Tuesday but ended the day with some gains as investors feared the possibility of a recession as central banks around the world took a hit. Strict measures to curb high inflation.
Oil prices fell, sending the price of US crude oil below $100 a barrel for the first time since early May.
Technology stocks rose and closed higher. The Standard & Poor’s 500 Gain 0.2% and Nasdaq, with a large technological weight, by 1.7%. Industry average Dow Jones It remained in the red, losing 0.4%. The yield on the 10-year Treasury note, which helps determine mortgage interest rates, fell to 2.82%.
US stocks have come under relentless selling pressure this year and the S&P 500 has suffered its biggest drop in the first half since 1970, as has the Federal Reserve. Move away from easy money policy to raise borrowing costs.
Investors are now awaiting the minutes of the Federal Reserve’s June meeting, scheduled for Wednesday, as they prepare for another rate hike. 75 basis points in the interest rate at the end of the month.
Traders are also watching the data and company’s comments for signs that inflation has touched. heights and economy refrigeratedwhere regular trading began after a long weekend and With corporate earnings season just weeks away.
“Recession concessions dominate the market,” he said. Sam StovallCFRA Strategist. “The real question is if the economy is slowing, how disappointing will the second quarter results or guidance be?”
Data released on Tuesday showed that new orders for US-made products rose more than expected in mayoindicating that the demand for products remains strong even during feed it He seeks to calm the economy.
Treasury bonds drop
The return of standard treasury bonds It fell to a one-month low on Tuesday and a major part of the yield curve inverted for the first time in three weeksAs growth concerns reduced risk appetite and increased demand for US bonds.
Yields have fallen from more than 10-year highs as investors fear a aggressive rate hike by the Federal Reserve, Aimed to stop rising inflation and push the US economy into recession.
Investors too Expectations lowered About how much the US central bank will raise its benchmark interest rate as fears of an economic recession grow.
“Recession alarm bells seem to be ringing a little bit louder every day,” he said. Thomas Simmons, an economist at Jefferies in New York. I have said that, “I think the yield curve may remain inverted for some time before the Fed actually changes the course of its monetary policy.”
The portion of the curve between two-year and 10-year bonds reversed again on Tuesday, a move seen as a reliable indicator of a recession in one or two years.
The two- and five-year portion of the curve also inverted for the first time in February 2020, another indication of the potential for an economic slowdown.
The benchmark 10-year yield US10YT = RR was trading at 2.780%, the lowest since May 27. It’s down from 3.498% on June 14, the highest since April 2011.
The yield on the two-year paper US2YT = RR settled at 2.816%, after hitting 2.729% on Friday, the lowest level since June 7. It has fallen from 3.456% on June 14, its highest level since November 2007.
(With information from Reuters)