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Monday, January 30, 2023

Wall Street plunged as much as 2% on fresh signs of a possible recession

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One of the biggest drags on the S&P 500 was the Meta papers which they relented after reports that European Union regulators determined that the company should not require users to accept personalized ads based on their digital activity.

Nevertheless, all tech heavyweights reeled as investors exercised caution toward high-growth companies whose performance would be slow in a complex economic landscape. This sentiment hit shares in Apple, Amazon and Alphabet and sent the Nasdaq index lower for the third straight session.

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Prospects for future economic growth were in the spotlight on Tuesday following comments from financial titans pointing to uncertain times ahead.

The CEO of Bank of America forecast three quarters of slightly negative growth next year, while JPMorgan chief Jamie Dimon said inflation will erode consumers’ purchasing power and a mild to steep US recession is likely on the horizon.

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“The market is very reactive right now”said David Sadkin, president of Bel Air Investment Advisors.

Fears about economic growth come amid a reassessment by traders about which way future interest rate hikes will take, following strong data on jobs and the services sector in recent days.

Nervousness about the direction of global growth has also weighed on oil prices, with US crude falling to levels last seen in January, before Russia’s invasion of Ukraine disrupted supply markets.

Source: Ambito

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