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Fear of interest rate decision: Wall Street continues to plummet

Fear of interest rate decision: Wall Street continues to plummet
Written by insideindyhomes

Dhe US stock exchanges fell further on Monday in the face of increasing interest rate and recession concerns. Two days before the US Federal Reserve’s interest rate decision, market participants feared that the unexpectedly high inflation could persuade the monetary authorities to raise interest rates even more significantly. The shares of technology companies were once again under pressure: Their selection index Nasdaq 100 reached its lowest level since November 2020 and ultimately lost 4.60 percent to 11,288.32 points.

The market-wide S&P 500 closed after its lowest level since March 2021 with a minus of 3.88 percent at 3749.63 points. Compared to the record high in January, this also means a decline of well over 20 percent, which means that the stock market barometer signals a bear market according to the usual definition. The leading index Dow Jones Industrial lost 2.79 percent to 30,516.74 points. At times it was at its lowest level since February 2021 – the recovery in the second half of May fizzled out.

There is nervousness, “because in addition to the inflation dynamic, there are also signs of a decline in consumption. That would hit the economy twice and lead to economic downturns,” said Andreas Lipkow from the Comdirect. In addition, the burgeoning Covid issue in China is getting on nerves of investors.

“In New York there is (also) the fear that large-cap technology stocks such as Tesla and Apple, which from a technical point of view have not yet formed a trend reversal formation, will also turn around,” added market analyst Jochen Stanzl from broker CMC Markets.

On the other hand, the market strategists at the US bank JPMorgan around Marko Kolanovi consider the price slide of the past few days to be exaggerated. The significant losses and the “sell-off” in cryptocurrencies already more than adequately priced in a recession risk. The experts are counting on a positive surprise from the currency watchdogs and a price recovery in the second half of the year. This is supported by continued strong consumption, the economy being freed from the restrictions of the corona pandemic and economic stimulus measures in China.

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