U.S. stocks fell and the dollar rose on Friday, even as Treasury yields rose as traders worried about inflation and what the Federal Reserve will do to combat it.
With higher rates looming, big tech stocks such as Amazon.com Inc and Alphabet Inc fell more than 2%. Big banks such as JPMorgan Chase & Co, Bank of America Corp and Deutsche Bank AG fell more than 2%, a reversal of the sector’s late summer rebound. And a shortfall from heavy equipment maker Deere & Co. added to the risky mood.
The Dow Jones Industrial Average fell 0.86% to 33,706.15, the S&P 500 lost 1.29% to 4,228.37 and the Nasdaq Composite fell about 2% to 12,705. ,22.
European stocks fell on Friday and posted a weekly loss as the highest-ever rise in German producer prices in July clouded the economic outlook. The pan-European STOXX 600 ended down 0.8%.
The MSCI World Equity Index, which tracks stocks from 47 countries, fell 1.3%.
“When market participants start to return from their holidays and look back…they will find that central banks are still a long way from meeting their inflation-control targets,” ING rate strategists said. in a note to customers.
“It means an ongoing struggle between expectations of central bank tightening and fears of recession.”
U.S. central bank officials have “still plenty of time” before they must decide how big an interest rate hike to approve at their Sept. 20-21 policy meeting, the chairman said on Friday. Richmond Federal Reserve, Thomas Barkin.
But more hawkish official comments from the Fed on Thursday helped push the dollar index up Friday by about 0.5%, a month-high. The euro fell 0.44% to $1.003.
US Treasury yields also rose on Friday, mimicking the selloff in European bonds on inflation fears.
The benchmark 10-year US Treasury yield hit a monthly high of 2.9776%, just below the 3% threshold it crossed in May for the first time since 2018, as investors worried about the project. of the US Federal Reserve to tighten monetary conditions.
Next week, investors will pay close attention to the minutes of the European Central Bank’s July meeting, as well as comments from Fed Chairman Jerome Powell when he addresses the annual conference of central banks. world championships in Jackson Hole, Wyoming, on August 26.
“Incoming data, on the net, suggests that the US economy retains fairly healthy momentum,” Michael Gapen, an economist at Bank of America, wrote in a client note. He cited improving data on motor vehicle assembly and retail sales, but noted a drop in housing numbers.
“Incoming data was not uniformly strong…and we note stronger momentum will eventually be met with further firming in policy rates,” Gapen added.
OIL, GOLD AND CRYPTO OFF
Oil prices stabilized on Friday, but fell for the week on a stronger US dollar and fears that an economic slowdown would weaken demand for crude.
U.S. crude fell 0.4% to $90.14 a barrel and Brent to $96.04, down 0.57% on the day.
Cryptocurrencies fell sharply, with sudden selling dragging bitcoin to a three-week low. It was last at $21,332, down nearly 9% on the day.
Gold was heading for its first weekly decline in a month after hitting a three-week low. Spot gold fell for a fifth straight session, down around 0.67% to $1,746 an ounce in what could be its longest losing streak since November 2021.
(Reporting by Lawrence Delevingne in Boston and Elizabeth Howcroft in London; Editing by Chris Reese, Nick Macfie, Jonathan Oatis and Diane Craft)
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