New York stocks traded mixed on concerns that the Federal Reserve (Fed) might tighten its pace of tightening.
As of 9:58 a.m. at the New York Stock Exchange (NYSE) on the 23rd (Eastern Time), the Dow Jones Industrial Average recorded 33,051.50, up 12.11 points (0.04%) from the previous field.
The Standard & Poor’s (S&P) 500 index fell 8.15 points (0.20%) to 4,146.14 from the battlefield, and the Nasdaq index, centered on technology stocks, recorded 12,436.63, down 55.06 points (0.44%) from the battlefield.
The stock market has fluctuated in the early days of the market.
Investors are concerned that the Fed may aggressively tighten tightening in September to contain inflation.
In the past, stocks have been pricing in the possibility that the Fed will slow rate hikes.
But ahead of Fed Chairman Jerome Powell’s speech at the Jackson Hole meeting scheduled for the 26th, there are growing concerns that Chairman Powell might pour cold water on the market’s mood.
The US interest rate futures market is also rapidly reflecting this sentiment in prices.
Currently, the market sees a 54% chance that the Fed will raise the benchmark interest rate by 0.75 percentage points at its September meeting.
The atmosphere has reversed from a 50% chance of a 0.50 percentage point rate hike up to a week ago.
Growing concerns regarding a European recession are also weighing on the stock market.
The euro fell to its lowest level in 20 years once morest the dollar.
This is because the outlook for the European economy is deteriorating as the energy crisis in Europe grows.
S&P Global’s composite Purchasing Managers’ Index (PMI), which combines services and manufacturing, recorded 49.2 in August, down from 49.9 in the previous month.
The figure was the lowest in 18 months, and the index fell below 50, indicating a contraction phase.
The manufacturing PMI fell for the third straight month to 49.7, below 50.
The service PMI recorded 50.2, above 50, but the lowest level in seven months.
Energy, materials (materials), industrial, and consumer discretionary stocks in the S&P 500 rose, while health, real estate, and utility stocks fell.
Shares of US department store brand Macy’s rose more than 5% on news that quarterly earnings were better than expected.
Shares of sporting goods retailer Dix Sporting Goods rose more than 3% on news that the company’s quarterly earnings beat expectations and raised its annual forecast.
Shares of security software company Palo Alto Networks rose more than 10% on strong quarterly results.
Zoom Video’s share price fell more than 12% as the company’s third-quarter and full-year earnings forecasts were lowered while the company’s quarterly sales were below expectations.
New York stock market experts said the market has yet to factor in the risk and should remain open to the possibility of another further decline.
“It feels strongly that the bear market is not over,” said Lisa Charlotte, chief investment officer at Morgan Stanley Wealth Management, in the report.
“Rising costs, slowing growth, strong dollar headwinds, inventory surges and loss of pricing power will result in disappointing results,” he said.
“The earnings forecast for 2023 will be readjusted by the beginning of the fourth quarter,” he said.
Some predicted that the Fed’s intensive tightening was not over.
Veritas Financial Group’s Greg Branch told CNBC the day before that “we haven’t seen the peak of the hawkish Fed yet,” given the current level and persistence of inflation.
He judged that the recession in the second half of the year might be deeper and longer than initially expected, and predicted that the rate of interest rate hike in September is likely to exceed 0.50 percentage points.
European stock markets were mixed.
Germany’s DAX index traded in a strong zone, while the UK FTSE index fell 0.65%.
The pan-European STOXX600 index is down 0.39%.
International oil prices rose more than 2%.
The price of West Texas Intermediate (WTI) for October contract rose 2.88% to $92.96 per barrel, and the price of Brent for October contract rose 2.45% to $98.80 per barrel.
/yunhap news