Investors are pricing growth prospects amid rising prices and tighter monetary policy.
U.S. stocks fell on a volatile trading day as investors gauged growth prospects amid rising prices and tighter monetary policy. Treasuries held up gains amid a steady stream of safe-haven bids.
The S&P 500 slipped back into the red in the last hour of trading, a day after the biggest one-day decline since June 2020 that wiped $1.5 trillion off its market value. The Nasdaq 100 posted modest losses, slipping 0.4% on Thursday. Cisco Systems Inc. fell more than 10% after warning that Chinese lockdowns and other supply disruptions would wipe out sales growth in the current quarter.
Treasury yields fell across the board amid growing anxiety about the health of the global economy and a sell-off in equity markets. Lower-than-expected jobless claims in the United States and a sharp drop in a regional Philadelphia Fed survey also spurred a wave of buying. Gold gained while the dollar weakened against all of its Group of 10 counterparts.
The selloff in stocks this week left the S&P 500 on course for its seventh weekly decline, the longest streak since the bursting of the dotcom bubble more than two decades ago. Bets that strong earnings could help investors ride out this year’s turbulence have been thrown into doubt after US consumer titans reported a growing impact of high inflation on margins and consumer spending. Meanwhile, Federal Reserve officials reiterated this week that tighter monetary policy awaits them, as investors fret over risks of stagflation.
On the corporate front, Twitter Inc. executives told employees on Thursday that the $44 billion deal to sell the company to billionaire Elon Musk is proceeding on schedule. Apple Inc. executives previewed its upcoming mixed reality headset to the company’s board of directors last week, indicating that development of the device has reached an advanced stage, according to people with knowledge of the company. topic. Kohls Corp. cut its earnings and sales outlook in an already difficult week for retail businesses, as inflationary pressures reduced profits.
Elsewhere, the Swiss franc extended its lead against the dollar after Swiss National Bank President Thomas Jordan said policymakers were ready to act against inflation.
What damage will be done to the US economy and global markets before the Fed changes tack and eases policy again? The “Fed Put” is the theme of this week’s MLIV Pulse survey.
Some of the major movements in the markets:
- The S&P 500 fell 0.6% at 4 p.m. PT
- The Nasdaq 100 fell 0.4%
- The Dow Jones Industrial Average fell 0.8%
- The MSCI World index fell 0.6%
- The Bloomberg Dollar Spot Index fell 0.9%
- The euro rose 1.2% to $1.0590
- The British pound rose 1.2% to hit $1.2495
- The Japanese yen rose 0.4% to 127.71 per dollar
- The yield on 10-year Treasury bills fell four basis points to 2.85%
- Germany’s 10-year yield fell eight basis points to 0.95%
- The UK 10-year yield was little changed at 1.86%
- West Texas Intermediate crude rose 1.7% to $111.44 a barrel
- Gold futures rose 1.4% to $1,847.70 an ounce
–With help from Ksenia Galouchko, Srinivasan Sivabalan, Robert Brand, Isabelle Lee and Peyton Forte.