US stocks see robust low, pressured by Fed and confidence data fall

New York stock markets closed down sharply on Tuesday (28) of up to almost 3%. American investors are still concerned about the rate at which the Federal Reserve (Fed, the US central bank) is raising interest rates in the US.

In this trading session, three BC directors adopted a hawkish when commenting on the need to control inflation through the entity’s next steps. In addition, the further-than-expected decline in consumer confidence in the country helped to deteriorate risk sentiment on Wall Street.

The Dow Jones Industrial Average closed down 1.56% to 30,946.99 points, the S&P 500 was down 2.01% to 3,821.55 points, and the Nasdaq was down 2.98% to 11,181.54 points. .

After a positive open that followed encouraging signs of an easing of the Covid-19 lockdown in China, the first sign of weakness in New York stock markets came after the Consumer Confidence Index, as measured by the Conference Board, dropped 103.2. in May to 98.7 in June. The data confirmed the expectation of a fall, but came below expectations.

In ING’s view, the result reflects the pessimism of Americans as comments intensify about the possibility of the US entering recession soon, in the face of aggressive monetary tightening by the Fed. At the same time, there is a continuing deterioration in real income due to inflation and concerns about the sharp fall in equity markets.

Stock indexes deepened lower after harsh comments from the US central bank. District President of St. Fed’s Louis, James Bullard, said the central bank’s upcoming actions will help raise rates quickly to contain inflation. According to him, it will be necessary to keep real interest rates above the inflation rate to control the rise in prices.

The head of the New York Fed, John Williams, called the forecast that the Fed funds rate will end the cycle of monetary tightening between 3.5% and 4% as “reasonable”. President of the San Francisco district, Mary Daly remains optimistic about the possibility that the American economy will support well the interest rate increases promoted by the entity.

Sensitive to the monetary outlook, shares of large technology companies were among the most penalized on Tuesday. Amazon shares closed down 5.14%, while Microsoft, Apple and Alphabet – Google’s parent company – dropped about 3%.

Among the 11 S&P 500 sectoral sub-indices, only energy did well, following the movement of oil in the futures market. Among the highlights, Exxon Mobil advanced 2.83% and Occidental Petroleum rose 4.76%.

Source: CNN Brasil

You may also like