The Wall indices did not manage to hold their gains until the end, but the losses are modest as investors try to assess the outlook for the US economy and the possible course of the Federal Reserve in raising interest rates.
US market indexes hit an impressive rally last week, with the S&P 500 gaining 6%, ending a negative three-week losing streak. The Dow Jones industrial average was up 5%, while the tech Nasdaq was up 7%.
The jump in the index was followed by a barrage of disappointing economic data which forced many investors to re-evaluate their forecasts for the next increase in US interest rates. According to this scenario, the weakening of the economic growth rates or even the risk of recession, will force the Federal Reserve to proceed with milder increases in interest rates in the coming months.
However, Fed Chairman Jerome Powell warned in a speech to Congress last week that achieving the so-called “smooth landing” of the economy, ie avoiding a recession, would be “a difficult task”.
Indicators – Statistics
On the board, the Dow Jones lost 62.42 points or -0.20% to 31,438.26 points, while the S&P 500 fell 11.63 points or -0.30% to 3,900.11 points. The technology Nasdaq slipped 86.73 points or -0.75% and closed at 11,520.89 points.
Of the 30 stocks that make up the Dow Jones industrial average, 9 closed with a positive sign and 19 with a negative. The largest gain was recorded by UnitedHealth Group with profits of $ 10.02 or 2.02% at $ 505.66, followed by Chevron at $ 147.57 with an increase of 1.93% and Merck & Co. with gains of 1.37% to $ 94.41
The shares with the biggest losses were Salesforce (-2.48%), Nike (-2.13%) and Boeing (-1.99%).
Data released today in the US showed that orders for durable goods rose more than expected in May, a sign that business investment remains strong despite rising interest rates and growing concerns about the outlook for the economy.
In particular, orders for durable goods increased by 0.7% in May compared to analysts’ estimate for an increase of 0.2%. This is the seventh increase in a total of eight months.
At the same time, orders for capital goods, a sign of investment in equipment that does not include aircraft and military equipment, increased by 0.5% last month, according to data released today by the US Department of Commerce on Monday.
The data show that investment was strong in May despite the decline in manufacturing indices in June in the New York and Philadelphia area, among others. The latest research of S&P Global also showed a decrease in manufacturing production.
At the same time, new contracts for the second-hand home market in the United States rose unexpectedly in May, ending a negative six-month losing streak as higher mortgage rates continued to curb demand.
In particular, the index for pending home sales rose 0.7% in May to 99.9, after a two-year low in April, the National Association of Brokers (NAR) announced today. Analysts in a Reuters poll expected the index to fall by 3.7%.
On an annual basis, however, outstanding sales fell by 13.6% in May.
“Despite the small gains in sales from last month, the housing market is clearly in transition,” said Lawrence Yun, chief economist at NAR. “Contracts have fallen significantly from a year earlier due to much higher interest rates today,” he added.