The main Wall Street indices closed with mixed signs and far from the lows of the day, in a session that started with the positive reaction of the American market, to follow a “dive” that brought the S&P 500 to bear market, exceeding -20 intra-conference % from its all-time high on January 3, 2022.
Finally, the S&P 500 closed with marginal gains (as did the Dow), with the broader index still within breathing distance of the bear market. The limit for the bear market was to slide below 3,837.25 points. The Nasdaq remained in negative territory but covered a large part of its intra-conference losses.
This was the eighth consecutive week of losses for the Dow, marking the largest decline since April 1932, according to FactSet.
The S&P 500 and Nasdaq recorded the seventh consecutive week of losses, which reflects the strong concern about whether the Federal Reserve can curb the inflation rally without derailing the economic recovery.
Stock market indicators suggest that investors are worried about the risk of a recession. The rotation within the US stock market shows that investors are pricing higher chances of recession compared to the strength of recent financial data.
The initial positive reaction in the American market was drawn from the strong session in the Asian stock markets, after the decision of the central bank of China to reduce its interest rates. In particular, the central bank of the country reduced the interest rate on five-year loans by 15 basis points, to 4.45% from 4.6%, in a move to stimulate growth.
“While the rest of the world is thinking of raising interest rates to fight inflation, China is lowering interest rates to help the economy,” said JJ Kinahan, an analyst at tastytrade Inc., an online stock exchange. “I think this is a small warning,” he said. .
The rally at the start of the session gave investors the opportunity to start selling shares amid “growing uncertainty and concern” about the course of the economy, as the US Federal Reserve raises interest rates to fight high inflation, according to the Wayne Wicker, Investment Manager at MissionSquare Retirement. “Investor psychology has driven the sell off,” Wicker said.
“The stock market remains volatile,” said Fawad Razaqzada, an analyst at City Index and Forex.com.
“Inflation. Rising interest rates. Low economic growth. Stagnant inflation. Recession. Most importantly: the Fed is not there to provide a cushion, as it used to be,” he said, explaining market volatility.
In the meantime, his performance 10-year US government bond fell by 7 basis points to 2.78 %%, while the dollar gained 0.4% according to the ICE US Dollar index, however in the week it slipped by 1.4%.
Indicators – Statistics
On the dashboard, the industrial Dow Jones added 0.03% to 31,261.90 points, while intra-conference it lost up to 617 points. The wider S&P 500 closed at + 0.01% at 3,901.36 points, with its losses during the meeting reaching -1.85%. The technological closed with a negative sign Nasdaq reducing losses – from levels close to 3% – to 0.3% to 11,354.62 points.
In weekthe Dow fell 2.9%, the S&P 500 lost 3% and the Nasdaq slipped 3.8%.
Of the 30 Dow Jones shares, 16 closed with a positive sign and 14 with a negative. The profits were led by Cisco with a rise of 2.92%, and Salesforce (+ 2.6%) and McDonald’s (+ 2.14%). The biggest losses were recorded by Boeing (-5.07%) and Caterpillar (-4.32%).
Shares of Ross Stores sank 22.47% after the retailer announced disappointing quarterly results and narrowed its outlook due to persistently high inflation and rising costs in transportation and wages.
Losses of 14.07% for Deere & Co., although the agricultural, construction and forestry machinery company announced better-than-expected profits and revenue for the second quarter.