Wall Street returned to a downward trajectory on Wednesday, after a two-day uptrend, with worries about a slowdown in economic growth and an oil rally cutting investors’ buying sentiment.
The caution was evident on the board from the first minutes of the session, although the Nasdaq technology index tried at the beginning of the day to continue the upward pace that started on Monday, before it also succumbed to the pressure of sellers who easily dominated due to the small trading volume. held today by investors in anticipation of inflation data on Friday.
Investors’ concerns about a slowdown in growth were initially sparked by the OECD’s ongoing revision of the global economy forecast.
The OECD cut its forecast for global economic growth this year to 3% from 4.5% previously, estimating that it will slow down further to 2.8% in 2023, due to “a package of adverse shocks” from its invasion. Russia in Ukraine and the lockdowns to contain the pandemic in China.
The OECD forecast is close to the 2.9% growth forecast made by the World Bank on Tuesday.
Concerns have been heightened by rising oil prices, which reinforces speculation that inflationary pressures will continue to push the Federal Reserve and other central banks to continue tightening their monetary policies aggressively.
US crude for July delivery was up 2.26% at $ 122.11 a barrel, while Brent crude was up 2.5% at $ 123.58. This is the highest level of both contracts since March 8.
In particular, Brent’s August contract was up 2.5% or $ 3 and closed at $ 123.58.
Investors are now turning their attention to US inflation data to be released on Friday in order to get a better picture of the economy and the Fed’s intentions.
“With monetary policy fueling expectations of lower growth, there is an increasing level of vicious circle. explains Stephen Innes, CEO of SPI Asset Management, adding: “And while these tighter financial conditions are the obvious way to reduce inflation, they are also commensurate with lower asset prices.”
Indicators – statistics
In the midst of this climate, the key indicators of Wall Street ended the day with significant losses, but far from the lows of the day.
In particular, on the board, the Dow Jones fell by 269.24 points or 0.81% and lost again the level of 33,000 closing at 32,910.90 points, while the broader S&P 500 fell 1.08%, finishing at 4,115 , 72 units. With losses of 0.73%, despite the initial rise, the technological Nasdaq ended the day at 12,086.27 points.
Of the 30 shares of the blue chips index, only four ended the session higher, with Caterpillar leading with a rise of 1.19% and Salesforce (+ 1.09%), Nike (+ 0.60%) and Chevron ( + 0.52%) to follow. The remaining 26 shares closed with losses of 0.19% and above, with the largest decline recorded by the shares of Intel (-5.28%), Goldman Sachs (-2.12%) and American Express (-1.62 %).
Credit Suisse shares lost more than 1% in individual shares after the bank warned that it expects to show losses in the second quarter as a result of the war in Ukraine and the increase in interest rates.
Macro
At the end of the day, US wholesale inventories rose sharply in April compared to the previous month, reflecting companies’ efforts to renew their inventories amid ongoing supply chain problems.
In particular, US wholesale inventories rose 2.2% in April on a monthly basis, but at a slower pace than the revised 2.7% growth recorded in March, according to data released by the US Department of Commerce on Wednesday.
Economists polled by The Wall Street Journal expected inventories to rise 2.1% in April.
The ratio of inventories to sales was 1.25 in April, from 1.23 in March and over 1.21 in the same month last year.
Source: Capital
I am Sophia william, author of World Stock Market. I have a degree in journalism from the University of Missouri and I have worked as a reporter for several news websites. I have a passion for writing and informing people about the latest news and events happening in the world. I strive to be accurate and unbiased in my reporting, and I hope to provide readers with valuable information that they can use to make informed decisions.
