“Apple” shares lead the declines of the American Stock Exchange, and Dow Jones loses 197 points
US stocks continued their modest start to the month of September, in conjunction with the rise in oil prices and the increase in expectations of maintaining high interest rates, which caused the Nasdaq index to decline, during trading on Wednesday, by more than 1% of its value, and the Dow Jones Industrial Average lost 197 points.
During Wednesday’s trading, and after the announcement of Russia and Saudi Arabia’s decision to continue implementing the decision to cut voluntary production until the end of the year, oil prices rose, which investors considered as a sign that the Federal Reserve will continue to impose its strict policies for some time, including raising interest rates, during the remainder of its meetings. this year.
On Wednesday, the Nasdaq index fell by 1.06%, led by Apple, which lost more than 3.5% of its value. The S&P 500 index fell by 0.70%, while the Dow Jones Industrial Average fell by 0.57%.
The high interest increases the cost of borrowing for companies, reducing their profits, and at the same time reducing the present value of profits expected to be achieved in the future. Big tech companies are usually the most affected by higher interest rates.
The pain of “Apple” investors was compounded by reports of China’s request for workers in its government agencies to stop using “iPhone” devices produced by “Apple” at work, in what some saw as retaliation for US decisions targeting Chinese companies.
In Europe, stocks fell for the sixth consecutive session on Wednesday, after fears of slowing global growth weighed on risk appetite, and rising bond yields added to interest rate concerns.
The Stoxx Europe 600 index closed down 0.6%, after hitting a more than one-week low earlier in the day.
In further evidence of slowing economic growth, recent data showed German industrial orders fell more-than-expected in July, easing after sharp gains in the aviation sector the previous month.
European bank shares were among the hardest hit, dropping 1.5%, to touch their lowest in eight weeks, according to Reuters.
The main index of the Italian Stock Exchange, which is heavy with banking stocks, led losses among European stock exchanges, down 1.5%.
Policymakers at the European Central Bank warned investors, who are betting overwhelmingly against a central bank rate hike next week, that a decision remains uncertain.
In a related matter, oil prices recorded an increase on Wednesday at the settlement, retreating from their early declines, with dealers expecting more withdrawals from US crude oil stocks, after Saudi Arabia and Russia extended the voluntary reduction of their supplies.
Brent crude futures settled, up 56 cents to $90.60 a barrel, while US West Texas Intermediate crude futures rose 85 cents to $87.54. Both benchmarks rose by $1, before trimming their gains.
“We have very low crude supplies in the United States, as several weeks of large drawdowns of crude oil have pushed up prices,” said Bob Yawger, director of energy futures at Japan’s Mizuho Bank.
Six analysts polled by Reuters estimated that US crude inventories fell, on average, by about 2.1 million barrels in the week ending Sept. 1.
On Tuesday, Saudi Arabia and Russia announced the extension of the voluntary cut in oil supplies until the end of this year. Saudi Arabia will reduce supply by 1 million barrels per day, while Russia will reduce 300,000 barrels per day. This came in addition to a cut in April agreed by several members of the OPEC+ alliance, which includes the Organization of the Petroleum Exporting Countries (OPEC) and its allies, and will last until the end of 2024. But the two countries said they would review market conditions on a monthly basis.
Against a basket of currencies, the dollar rose to 105, surpassing its six-month high of 104.90, which it touched on Tuesday evening, New York time. A stronger dollar could affect demand for oil, by making crude more expensive for holders of other currencies.
2023-09-06 22:52:40
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