- The S&P 500 and the Dow Jones posted losses amid a climate of risk aversion.
- The Nasdaq Composite regains some ground and remains above the 10,000 figure.
- Expectations of a higher than expected Fed rate hike soured sentiment and underpinned the USD.
- US Treasury yields hit new multi-year highs, above the 3% threshold.
US stocks they continue their decline, losing between 0.26% and 0.56%, except for the high-tech Nasdaq Composite, which trimmed some of its losses, rising 0.25%.
Expectations of a further rate hike by the US Federal Reserve weighed on sentiment, US stocks fell
The S&P 500 and the Dow Jones Industrial Average are down between 0.26% and 0.56% each, standing at 3,739.23 and 30,345.10, respectively, at the time of writing. For its part, the Nasdaq Composite rises 0.25% and stands at 10,836.09.
For its part, the dollar index advanced to a new 20-year high around 105,433, gaining 0.22%, on Tuesday. US Treasury yields remain elevated. The benchmark 10-year note rate is at 3.441%, up six basis points, reflecting traders’ expectations of a 75 basis point rate hike.
Investor sentiment remains negative, weighed down by a WSJ story revealing that US Federal Reserve officials could “surprise” markets with a 0.75% bps higher rate hike than expected. In addition, the US economic data that crossed the wires was mixed, led by the increase in the producer price index, which showed that prices increased in May by 10.8% year-on-year, although less than expected, indicating that it’s not slowing down, further cementing the Fed’s rate hike.
Later, IBD/TIPP US economist optimism for June fell to 38.1 from 41.2 in May. Raghavan Mayur, president of TechnoMetrica, which conducted the survey, wrote: “The numbers for June are pretty bleak. A majority of Americans (53%) believe we are in a recession, and two-thirds (67%) believe the economy is not it is getting better”.
Looking at sectors, the main gainers are Energy, up 1.9%, driven by high oil prices, followed by Technology and Consumer Discretionary, posting gains of 0.29% and 0.05%, respectively. On the contrary, public service companies, basic consumption companies and health companies lost 3.04%, 1.68% and 1.2% each.
In the commodity complex, US benchmark oil WTI gains 0.88%, trading at $122.00 BPD, while precious metals such as gold (XAU/USD) fall 0.99%, changing hands to $1,813.45 a troy ounce as US Treasury yields continue to climb to multi-year highs.
Key technical levels
Source: Fx Street
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