Major U.S. stock indexes fell on Tuesday as traders assessed the Fed’s next move and whether the U.S. could finally slip into a recession.
S&P 500 IndexDown 0.5% after two consecutive days of gains,NasdaqThe index fell 1.5%, retreating after surging 1.9% in the previous session.Dow Jonesfell 0.1%.
Stocks hit session lows and interest rates hit highs after Federal Reserve Governor Lael Brainar said on Tuesday that the central bank needs to shrink its balance sheet quickly to keep inflation down.
Deutsche Bank, the first major Wall Street investment bank to predict a U.S. recession, believes that a U.S. recession is imminent under the more aggressive response to inflation by the Federal Reserve.
Deutsche Bank pointed out in its latest report that it is expected that by the end of next year and early 2024, the Federal Reserve will over-tighten policy, which will deal a major blow to the U.S. economy and cause two consecutive quarters of negative growth and rising unemployment, which is in line with recession requirements. , although it will be only a mild recession.
The most-watched yield curve, the gap between 2-year and 10-year U.S. Treasury yields, remained inverted on Tuesday after first inverting last week. Historically, yield curve inversions have historically preceded recessions, as investors dumped short-term bonds in favor of longer-dated ones, expressing doubts about the near-term health of the economy.
As of Tuesday 23:00 Taipei time:
- Dow JonesDown 42 points and 0.12%, temporarily reported 34879.68 points
- NasdaqDown 216 points or 1.49%, temporarily reported 14316.5 points
- S&P 500 fell 22.31 points, or 0.49%, to 4560.33
- half feeDown 130.3 points or 3.8%, temporarily reported 3294.6 points
- 10-year U.S. Treasury yieldreported 2.543%
- New York Light crude rose 0.25% to $103.54 a barrel
- Brent CrudeUp 0.21% to $107.76 a barrel
- goldUp 0.09% to $1,935.9 an ounce