The Dow fell more than 100 points amid concerns that An accelerated rate hike by the US Federal Reserve (Fed) will push the US economy into recession.
At 9:13 p.m. Thai time, the Dow Jones Industrial Average was 29,094.30 points, minus 108.58 points, or 0.37%.
The market was also pressured by the strong dollar. and the rebound in US government bond yields
The strength of the dollar has raised investors’ fears that it will affect the bottom line of listed companies with foreign earnings. The rise in 10-year US Treasury bonds, which are US government bonds used as a reference for global bond prices. This includes the US mortgage interest rate. will make consumers have less money for spending while the cost of paying off the mortgage loan increases And companies will face higher costs of debt settlement. causing these companies to reduce their investment and reduce dividend payments to investors
The yield on two-year bonds is sensitive to the Fed’s monetary policy. It rebounded above 4.3% today and is above the 10-year and 30-year U.S. Treasury yields.
Short-term bond yields bounce higher than long-term As a result, the US bond market has an inverted yield curve, signaling a recession.
Jamie Dimon, chief executive of JPMorgan Chase, said the US and global economies were likely to enter a recession in the middle of next year. It was affected by the rising inflation. interest rate rebound and the Russian military invasion of Ukraine
The International Monetary Fund (IMF) released its World Economic Outlook today, downgrading its forecast for global growth in 2023 to 2.7 percent from 2.9 percent.
“The worst awaits ahead. And many people will be affected by the recession next year,” the report said.
The IMF said the report was indicative of its weakest expansion since 2001, beyond the time of the financial crisis. and the heavy spread of COVID-19
Investors eyeing listed company earnings reports this week. Analysts expect earnings to slow in the third quarter, hurt by the dollar’s appreciation. soaring inflation Fed rate hike and geopolitical uncertainty
Refinitiv data shows that companies in the S&P 500 index rose just 4.1% in the third quarter, down from the 11.1% expected in early July.
Meanwhile, investors are keeping an eye on the minutes of the Fed’s September meeting on Oct. 12 and the Consumer Price Index (CPI) on Oct. 13 for any indication of the Fed’s interest rate direction.
The survey found that the CPI continued to indicate hot inflation in September. It rebounded more than 8%, near a 40-year high, despite a slowdown from August.
The headline CPI, which includes food and energy, rose 8.1 percent in September from a year-on-year increase of 8.3 percent in August.
On a monthly basis, the headline CPI is expected to rise 0.3% in September from 0.1% in August.
Analysts also expected the core CPI, excluding food and energy, rose 6.5 percent year-on-year in September. higher than the 6.3% level in August.