Fear of a possible recession led to a sharp decline in Wall Street and a black day for European markets

People walk on the floor of the New York Stock Exchange (Reuters/Brendan McDermid)

stock prices Friday fell around the world on signs of weakness in the global economyAt a time when central banks are increasing their pressure with new interest rate increases.

When the market is closed, the indicator daw Jones It showed a decrease of 473.55 points 1.6% to 29603.13 points Standard & Poor’s 500 It lost 64.49 points, or 1.7%, to 3,694.32 points Nasdaq It fell 1.7%, or about 193.70 units, to 10,873.10.

European shares also fell on the back of preliminary data showing Business activity experienced its biggest monthly contraction since the start of 2021.

Added to pressure a new plan for London tax cut announcedwhich pushed up UK yields as it would eventually force its central bank to raise interest rates further.

FILE PHOTO: A trader works at the New York Stock Exchange (Reuters/Andrew Kelly)
FILE PHOTO: A trader works at the New York Stock Exchange (Reuters/Andrew Kelly)

The US Federal Reserve and other central banks around the world raised interest rates sharply this week in hopes of countering inflation He promised new big increases in the future, but these measures will also mean Curb their respective economiesraising the possibility of a recession as growth slows everywhere.

In addition to Friday’s disappointing data on European business activity, a report indicated that activity in the US is also slowing, though not as much as in previous months.

Financial markets are now fully absorbing the harsh message from the Federal Reserve There will be no decline in the fight against inflationsaid Douglas Porter, chief economist at BMO Capital Markets.

prices raw It fell to its lowest levels since the beginning of the year amid concerns that the weak global economy will consume less fuel.

Black day in Europe

Frankfurt Stock Exchange (Reuters)
Frankfurt Stock Exchange (Reuters)

The European energy and commodities shares fell about 6% on Friday, The broader index of regional stocks was pushed to a two-year low as dismal data from the euro zone pointed to an economic slowdown, raising concerns about the impact of the central bank’s actions.

Actions United kingdom They lost 2%, but the decline was capped by a 3% fall in the pound, after British Finance Minister Kwasi Quarting announced a series of tax cuts and measures aimed at boosting growth.

Indicator pan european stokes 600 It fell 2.3 percent, bringing weekly losses to 4.4 percent, its worst week since mid-June.

A survey showed that the slowdown in business activity across the eurozone has deepened this month, It may be entering a recession Because consumer spending has slowed.

Europe’s largest economy GermanyThe main stock index hit its lowest level since November 2020, down 2.0%.

“Given the downside risks and the high degree of uncertainty, everything points to a contraction in economic activity in the eurozone in the coming quarters,” says ODDO BHF economists, adding that Germany may already be in a recession.

Europe is heading towards harsh northern winter, where doubts about energy supplies paint a bleak picture of the recovery of economic activity. Add to this the ECB’s clear priority to control inflation, a further 75 basis point hike in October is “certainly” on the table, said ING’s chief eurozone economist Bert Collin.

The Stokes 600 It’s down 20% on the year and is also 20% off all-time highs in January.

(With information from The Associated Press and Reuters)

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