Dow futures slump nearly 600 points as second day of selling in store after inflation shock

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US stock futures appeared to be below May lows as financial markets continue to falter from a surprise acceleration in inflation just days before a Federal Reserve interest rate decision .

  • Dow Jones Industrial Average YM00 futures
    fell 597 points, or 1.9%, to 30,762.

  • Futures of the S&P 500 ES00,
    fell 92.75 points, or 2.4%, to 3,808.

  • Futures on the Nasdaq 100 NQ00,
    decreased 350.5 points, or 3%, to 11,517.

On Friday, the Dow Jones Industrial Average DJIA,
fell 880 points, or 2.73%, to 31393, the S&P 500 SPX,
decreased 117 points, or 2.91%, to 3901, and the Nasdaq Composite COMP,
fell 414 points, or 3.52%, to 11,340.

The S&P 500 ended just a fraction above the May close of 3900.79 on Friday. The Dow and Nasdaq are also in danger of falling below May lows.

What is driving the market

Friday’s news shows that the consumer price index has soared to a new 40-year high of 8.6% year-on-year has caused investors to revalue the extent to which the Fed will raise interest rates.

In addition to speculation that the Fed could raise interest rates to 75 basis points on Wednesday, the 2-year Treasury yield TMUBMUSD02Y,
it has risen to 3.20% from 2.80% on Thursday.

“Sentiments have changed drastically as market participants have realized that we have a rampant food crisis due to Russian tactics in Ukraine, China could very well go in and out of the blockade for months causing global supply shocks , and a recession is likely to be the only option to eliminate demand and inflation, “said Peter Garnry, Saxo Bank’s head of equity strategy.

Hardening is not limited to the US Last week, the European Central Bank suggested that it could follow a quarter-point rate hike in July with a move of 50 basis points in September, as the Bank of England is also preparing another rate hike this week.

The fall has been strong in cryptocurrencies, with bitcoin BTCUSD,
extending its weekend fall to negotiate below $ 25,000. Cryptographic lending platform Celsius Network has suspended withdrawals and transfers.

“Celsius ‘unprecedented move is effectively blocking customers from accessing their assets, which will do little to allay critics’ fears that some DeFi platforms may be Ponzi schemes,” said Nigel Green, the adviser’s CEO. financier deVere Group.

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