Reporters reported that The Dow fell more than 400 points following the United States reported two straight quarters of gross domestic product (GDP) contraction. This indicates that the US economy has entered a technical recession.
At 8:46 p.m. GMT, the Dow Jones Industrial Average was 29,206.41, down 477.33, or 1.61%, while the S&P 500 is down 1.94% and the Nasdaq is down 2.5%.
The Commerce Department released its final estimate for 2Q22 gross domestic product (GDP) today, saying the US economy contracted 0.6% in the quarter. Unchanged from the second estimate, while the first estimate showed the economy contracted 0.9% previously, the US Commerce Department said. The US economy contracted 1.6% in the second quarter of 2012, the economy contracted for two consecutive quarters. put the US into a technical recession.
side Mr Jerome Powell The President of the US Federal Reserve (Fed) said earlier that Fed Fed’s Mission to Control Inflation May affect the economic growth of the United States. And he won’t consider a rate cut until he’s confident that inflation figures fall toward the Fed’s target of 2%.
The market is also pressured by the return of the dollar. and the rebound in US government bond yields today.
The Dow jumped more than 500 points yesterday, bolstered by the dollar’s depreciation. and the decline in US government bond yields After the Bank of England (BoE) announced an unlimited purchase of government bonds to stabilize the market.
However, today’s return to the dollar has raised investors’ fears that it will hurt the bottom line of listed companies with foreign earnings. The rebound in US 10-year bond yields used as a reference for global bond prices. This includes the interest rate on the mortgage loan. causing investors to worry regarding the cost of debt repayment of listed companies
In addition, investors were worried that today’s strong labor market data release would be a boost to the Fed’s accelerating interest rate hikes.
The number of first-time claims for unemployment benefits fell 16,000 to 193,000 last week, the Labor Department said. which is the lowest level since April and the analysts are expected to increase to 213,000.
The number of claims for unemployment benefits is below 215,000, the weekly average for the pre-COVID-19 pandemic in the United States.
Meanwhile, the US Department of Labor reported that The number of Americans who continued to claim unemployment benefits fell 29,000 to 1.35 million.