Wall Street closed higher on Tuesday, with the Nasdaq tech down 2.3% to its worst performance in a month as investors prepare for new sanctions against Russia and its possible policy. Federal Reserve in the coming months to tackle inflation to prove even more aggressive than originally expected.
The member of the Board The Fed’s Lael Brainard, in a speech today, described the work of reducing inflationary pressures as “outstanding” and said that the Fed will start shrinking its balance sheet as early as next month.
The Fed’s monetary policy committee “will continue to tighten monetary policy in a methodical manner, through a series of interest rate hikes and starting to cut the balance sheet rapidly, even from the May meeting,” Brainard said. of the Federal Reserve is on May 3-4.
At the same time, the international community remains shocked by the horrors revealed in the Ukrainian city of Bukha, with the cameras of international agencies recording hundreds of corpses of civilians on the streets after the withdrawal of Russian forces. The West is also launching new measures against Moscow, with the US Treasury Department announcing that it no longer allows any payment in dollars from Russian state accounts to US financial institutions to service Russia’s public debt. This means that Russia is now closer to a historic declaration of non-payment. At the same time, the EU plans to announce a ban on coal imports from Russia, while European officials have warned that the choice of measures to apply to gas remains on the table.
Indicators – Statistics
On the board, the Dow Jones lost 280.70 points or -0.80% and closed at 34,641.18 points, while the broader S&P 500 fell by 57.52 points or -1.26% to 4,525.12 points. The technology Nasdaq fell 328.39 points or -2.26% to 14,204.17 points.
Of the 30 stocks that make up the Dow Jones industrial average, only eight closed with a positive sign and 22 with a negative one. The largest gain was recorded by UnitedHealth Group with gains of $ 7.74 or 1.52% at $ 517.76, followed by McDonald’s at $ 248.51 with gains of 0.68% and Johnson & Johnson with gains of 0, 65% to $ 177.61
On the other hand, the three stocks with the biggest losses were Boeing (-4.46%), Salesforce (-3.98%) and Intel (-2.17%).
Meanwhile, US bond yields continue to attract investment attention amid growing speculation that the Federal Reserve will tighten its policy more rapidly, raising interest rates even higher by 50 basis points.
The 10-year yield in the US, today exceeded 2.55% from 2.409% on Monday afternoon. Recently, the yield on the two-year US exceeded the yield on the most distant debt, in a reversal of the yield curve that is often considered to show how the economy is heading for recession. Deutsche Bank, moreover, rang the alarm bell for one recession in the US in 2023 due to the aggressive policy of the Fed.
In business developments, the title of Twitter Inc. recorded a new jump of 2% today after yesterday’s rally at 27% in the wake of the announcement that Tesla CEO Elon Musk acquired a nearly 10% stake in the company. Musk was appointed a member of the Board. of the company with his term ending in 2024.
At the end of the day, the activity of the service sector in the US strengthened in March, drawing impetus from the further easing of restrictions, as shown by the data announced today by the Institute for Supply Management.
In particular, the ISM non-manufacturing index recovered to 58.3 in March after a 12-month low in February at 56.5. The March rise ended three consecutive months of the index falling. Analysts’ average estimates in a Reuters poll put the index at 58.4.
At the same time, the US trade deficit reached $ 89.2 billion in February, approaching the previous record, as the strong recovery of the US economy continues to give a strong boost to imports.
The trade deficit fell marginally 0.1% from a record high in January. Analysts’ average estimates in a WSJ poll put the deficit at $ 88.5 billion.
Government figures showed imports rose 1.3 percent in February to a record $ 317.8 billion, while exports climbed 1.8 percent to a record $ 228.6 billion.