Investors on the American stock exchanges continue to be cautious. Above all, inflation and high interest rates are affecting the markets – one sector is particularly under pressure.
The US stock exchanges fell again on Thursday after only tentatively stabilizing the day before.
US economic data presented a mixed picture and gave investors no reason to change their risk aversion. High inflation, future interest rates and the economic consequences remain decisive. Nervousness may also have prevailed ahead of Friday’s major downturn on the futures markets.
Tech stocks under pressure
Growth-sensitive technology stocks, which had recovered somewhat more sharply the day before, came under particular pressure. The Nasdaq 100 selection index, which is characterized by this industry, fell by 1.71 percent to 11,927.49 points. It slipped below 12,000 points and reached its lowest level since mid-July.
While the market-wide S&P 500 also fell quite significantly by 1.13 percent to 3901.35 points, the losses in the Dow Jones Industrial were somewhat smaller. The Wall Street price barometer lost 0.56 percent to 30,961.82 points. However, the Dow also had to accept the next low since July during the course of the day.
According to market observers, the market is currently missing new incentives ahead of the US Federal Reserve’s interest rate decision on Wednesday. Stockbrokers are firmly anticipating a further interest rate hike of 0.75 percentage points, although some consider a whole point possible because of the persistently high inflation. As a reflection of this, government bond yields rose across the board, with the policy-sensitive two-year interest rate hitting its highest level since 2007.
Numerous economic data published
Numerous economic data were published on Thursday, which were mixed on balance. While a regional sentiment indicator from the state of New York surprised positively, the industrial mood in the Philadelphia area disappointed with a significant downturn. However, particular attention was paid to retail sales, which increased in August compared to the previous month. However, they are down excluding volatile auto sales.
On the corporate side, Adobe investors didn’t like the software giant’s plans to acquire web design software company Figma. The willingness to pay around 20 billion US dollars for it triggered a price slump of 16.8 percent. Analysts described the price as high. Kirk Materne from the analysis company Evercore ISI suspected that the reason Adobe wanted to avoid with the takeover was that Figma would become a strong opponent.
In the wake of Adobe’s slide, software companies, which are also classified as part of the technology sector, were generally high on investors’ sell lists. Salesforce and Microsoft were the two biggest losers on the Dow, falling as much as 3.4 percent.
Banks benefit from higher interest rates
The banks fared better because they can benefit from higher interest rates in the lending business, for example. In a strong international industry environment, Goldman Sachs and JPMorgan stocks rose by up to 1.5 percent in the Dow. Analyst Magdalena Stoklosa from Morgan Stanley believes that the positive interest effect has not yet been adequately recognized in an industry study.
With a price rally of five percent, Netflix stood out positively on the Nasdaq. The streaming provider’s titles rallied after they received a positive recommendation from Evercore ISI. Analyst Mark Mahaney sees enormous opportunities in the cheaper, advertising-financed Netflix subscription, which is scheduled to start in 2023. Most recently, the streaming king had to watch in the highly competitive market as the competition grew stronger.
The euro moved around parity with the US dollar on Thursday. In New York trading, the common currency cost $0.9995. The European Central Bank set the reference rate at 0.9992 (Wednesday: 0.9990) dollars. The dollar thus cost 1.0008 euros.
US government bonds have fallen in line with the general rise in yields. While the futures contract for ten-year Treasuries fell by 0.35 percent to 114.56 points, the yield rose to 3.45 percent in this term.
Source: Stern
Jane Stock is a technology author, who has written for 24 Hours World. She writes about the latest in technology news and trends, and is always on the lookout for new and innovative ways to improve his audience’s experience.
