The Standard & Poor’s index closed lower on Wall Street, Tuesday, with its inability to recover from sharp sales in the previous session, ahead of a decision by the Federal Reserve that will reveal the path the US central bank will take in increases in interest rates.
Most analysts’ expectations are that the Federal Reserve will raise interest rates by 50 basis points at the conclusion of its meeting on Wednesday.
But some expect an increase of 75 basis points, expectations that are growing following a larger-than-expected increase in the US CPI for May.
Today’s data showed that the producer price index in the United States recorded a smaller-than-expected increase on an annual basis in May, but it remained high due to a jump in gasoline prices.
The Standard & Poor’s 500 closed down 13.82 points, or 0.37 percent, to 3,735.81 points, while the Nasdaq Composite Index rose 17.49 points, or 0.16 percent, to close at 10,826.72 points.
The Dow Jones Industrial Average closed down 144.73 points, or 0.47 percent, to 30,372.01 points.
The Standard Poor’s 500 recorded the fifth consecutive session of losses, the longest series of declines since early January, following the benchmark index confirmed its transformation into a bear market, on Monday, with its decline by more than 20 percent from its most recent record high, which it recorded on the third From January.
Producer Prices
US producer prices rose strongly in May amid a jump in the cost of energy products, indicating that inflation may remain elevated for some time. The US Labor Department said Tuesday that the producer price index for final demand rose 0.8% last month following rising 0.4% in April, and over the twelve months to the end of May, the producer price index jumped 10.8% following a 10.9% increase in April. / April, and economists polled by Archyde.com had expected the producer price index to rise 0.8% in May and jump 10.9% on an annual basis, and government data showed a significant increase in consumer prices in May, which raised fears that inflation in The world’s largest economy is likely to become entrenched.
European stocks
European shares gave up their initial gains on Tuesday, continuing a sell-off for the sixth straight session, on concerns regarding aggressive US interest rate hikes and a possible recession.
The pan-European Stoxx 600 index ended the trading session down 1.3 percent following falling 2.4 percent on Monday to its lowest level in more than three months.
Healthcare and industrial stocks led the decliners in Europe, while banking stocks rebounded 1.1 percent.
Oil and gas stocks also rose as crude prices rose amid concerns regarding tight global supplies.
Monday trades
US stocks tumbled Monday and the Standard & Poor’s 500 index confirmed that it is in a bear market, with growing fears that expected active interest rate increases from the Federal Reserve will push the economy into a recession.
Standard & Poor’s has fallen for four consecutive sessions, now down more than 20 percent from its latest record closing high on Jan. 3.
And closed all the major sectors in Standard & Poor’s with sharp losses.
Markets are under pressure this year as prices rise, including a jump in oil prices partly due to the war in Ukraine, which puts the Federal Reserve on course to take aggressive monetary tightening action.
The Federal Reserve is due to release its next monetary policy announcement on Wednesday and investors will focus on any indications of how far the Fed will go to raise interest rates.
Major technology companies, such as Apple, Microsoft and Amazon.com, were among the biggest losers on the Standard & Poor’s 500 Index, with the benchmark 10-year US Treasury yield hitting its highest level since April 2011 at 3.44 percent. Growth stocks are more likely to see their earnings suffer in a high interest rate environment.
The Standard & Poor’s 500 closed down 149.91 points, or 3.85 percent, to 3750.95 points, while the Nasdaq Composite Index fell 526.82 points, or 4.65 percent, to close at 10,813.20 points. The Dow Jones Industrial Average ended the trading session on Wall Street, down 857.70 points, or 2.73 percent, to 30,535.09 points.