In the New York Stock Exchange, major indices closed lower on concerns regarding the re-spread of the global COVID-19, centered on China.
Tesla plummeted following CEO Elon Musk announced he was withdrawing from the Twitter acquisition.
At the New York Stock Exchange (NYSE) on the 11th (local time), the Dow Jones Industrial Average fell 164.31 points (0.52%) to 31,173.84, and the Standard & Poor’s (S&P) 500 index fell 44.95 points (1.15%) to 3,854.43. , the Nasdaq index, centered on technology stocks, fell 262.71 points (2.26%) to 11,372.60, respectively.
Since the opening day, China’s re-proliferation of COVID-19 has weighed on the stock market. The Macau government announced that it will suspend business activities in all sectors except essential businesses from the previous day to the 18th due to the spread of Corona 10.
Investors are paying close attention to the company’s second quarter earnings release. This is because it is an indicator that can directly measure the extent of the economic slowdown caused by the monetary tightening policy of the US central bank (Federal Reserve).
PepsiCo is expected to report earnings on the 12th, Delta on the 13th, JP Morgan Chase and Morgan Stanley on the 14th, and Wells Fargo and Citi on the 15th.
According to Refinitiv data, the second quarter net profit of companies listed on the S&P 500 as of the 8th is estimated to have increased by 5.7% compared to the same period last year.
The consumer price index (CPI) for June, which will be released on the 13th, is also of interest. Confirming the peak of inflation (inflation) can have a positive effect on the stock market. However, some point out that a sharply lower-than-expected value might rather stimulate concerns regarding an economic downturn. Economists expect the CPI in June to rise 8.8% over the same period last year, outpacing the 8.6% gain in May, according to the Wall Street Journal.
The yield on the 10-year U.S. Treasury note fell below 3%, trading at 2.99%, and the yield on the 2-year Treasury bond traded at around 3.08%, continuing the inversion of short-term interest rates to exceed long-term rates.
Of the 11 sectors in the S&P 500, 9 were all down, excluding utilities and real estate.
Telecom and consumer discretionary stocks fell more than 2%, while tech stocks fell more than 1%.
Tesla stock fell 6.55% following Musk announced it was ending the deal.
The Macau government’s announcement of lockdown measures triggered weakness in casino-related stocks, including Win Resort (-6.46%). In addition, Booking.com (-2.54%), Carnival (-5.77%) and American Airlines (-3.87%) also fell.
According to the Chicago Mercantile Exchange (CME) FedWatch, the probability that the Fed will raise rates by 0.75 percentage points at its July meeting in the Federal Funds (FF) interest rate futures market is 93%, up from 92.4% in the battlefield. The probability of a 1 percentage point rate hike was 7.0%, down from 7.6% in the battlefield.
The Chicago Board Options Exchange (CBOE) Volatility Index (VIX) recorded 26.17, up 1.53 points (6.21%) from the previous field.
By Han Kyung-woo, reporter at Hankyung.com [email protected]