A trader works on the floor of the New York Stock Exchange (NYSE) in New York, USA, June 22, 2022. REUTERS / Brendan McDermid
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- US consumer spending may rise moderately; inflation higher
- The S&P 500 is heading for the worst first half of 1970
- Indices down: Dow 0.72%, S&P 0.58%, Nasdaq 0.81%
June 30 (Reuters) – US stocks fell on Thursday, putting the Dow at its worst in the first six months since 1962 on fears that persistently pursuing central banks to curb inflation would hamper global economic growth.
Fears of slowing growth and rising prices have spread to markets, with concerns about the recession taking center stage as global monetary policymakers are aggressively seeking to raise borrowing costs.
Federal Reserve Chairman Jerome Powell on Wednesday vowed not to allow the US economy to enter a “higher inflation regime”, even if it means raising interest rates to levels that put growth at risk. Read more
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The tech Nasdaq Composite (.IXIC) came out of the lowest levels of the session, but was still set for its biggest drop in the first half, while the benchmark S&P 500 (.SPX) tracked its biggest drop in percentages in January-June since 1970.
All three major indices are about to mark their second consecutive quarterly decline for the first time since 2015.
In recent days, Fed politicians have set expectations for a second rate increase of 75 basis points in July, although economic data painted a bleak picture of the American consumer.
“Until inflation passes meaningfully, which at this point will take, I believe, months, it will be difficult for the market to really find a bottom and start a rally,” said Ross Mayfield, an investment strategy analyst at Baird.
Meanwhile, consumer spending, which accounts for more than two-thirds of US economic activity, rose less than expected in May, showing a slight recovery in growth in the second quarter, while inflation maintained its upward trend. [nL1N2YH162]
“A lot of investors expected inflation data to really start falling. But what we’re finding is that it’s much more challenging and that inflation data has been rising for a long time and probably hasn’t peaked,” Sam Stoval said. chief investment strategist at CFRA.
Shares of high growth, including Microsoft Corp. (MSFT.O), Apple Inc (AAPL.O), Amazon.com Inc (AMZN.O) and Tesla Inc (TSLA.O), fell between 0.5% and 2%, leading declines for the Day.
At 12:01 ET, the Dow Jones Industrial Average (.DJI) fell 224.38 points, or 0.72%, to 30,804.93, the S&P 500 (.SPX) fell 22.26 points, or 0.58%, at 3,796.58 points (Sda Compo and Nasit). .IXIC) decreased by 90.17 points, or 0.81%, to 11,087.72.
At the beginning of the second half of the year, bruised markets will continue to focus on inflation, unemployment and rising interest rates, along with their impact on corporate profits.
“There’s a feeling that the profit picture will be the next shoe to fall and that the downward revisions of profits will catalyze another step lower in the market,” said Mayfield of Baird.
Walgreens Boots Alliance Inc (WBA.O) fell 4.5% as the drugstore chain maintained its full-year earnings forecast due to declining COVID vaccinations. Read more
Emission reductions outperform the NYSE by 1.87 to 1 and the Nasdaq by 1.79 to 1.
The S&P index recorded a new 52-week high and 42 new lows, while the Nasdaq recorded 11 new highs and 332 new lows.
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Report by Shreyashi Sanyal and Amruta Handekar in Bengaluru; Additional reports by Medha Singh; Edited by Arun Koyur
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