Equities New York close: Interest rate worries push tech stocks slightly lower | 07/25/22

NEW YORK (awp international) – Two days before the Fed’s next significant rate hike, tech stocks on the US stock exchanges have come under pressure again. The tech-heavy Nasdaq 100 index extended its recent losses somewhat on Monday, falling 0.55 percent to 12,328.41 points. Higher interest rates can cause financing costs to rise, particularly for fast-growing technology companies. At the most recent meeting, the Fed had already raised its key interest rate by 0.75 percentage points. An even larger step cannot be ruled out in view of the high inflation, but was recently rejected by several central bankers.

The leading index Dow Jones Industrial, on the other hand, rose by 0.28 percent to 31,990.04 points. The market-wide S&P 500 went up 0.13 percent to 3966.84 points.

The Fed faces the challenge of bringing high inflation under control without stifling growth at the same time. In the past few decades, very few tightening phases in the USA have remained without economic damage.

By the end of the week, investors may have a better idea of ​​whether the US is headed for a recession, as Europe seems to be, according to market analyst Craig Erlam of trading house Oanda. Because on Thursday the first estimate for economic growth in the second quarter is on the agenda. Economists consider it quite possible that the second quarterly minus in a row will be recorded. According to the usual definition, the economy would be in a technical recession.

Meanwhile, the stock market has been on the upswing since mid-June. Stockbrokers speak of a bear market rally, i.e. rising prices in the midst of an overall downward market environment. Since the beginning of the year, the Dow has lost around 12 percent, weighed down by fears of inflation and recession.

Looking at the technology stocks, Alphabet and Microsoft will present quarterly figures on Tuesday, Meta on Wednesday and Amazon , Apple and Intel on Thursday. At the beginning of the week, the papers of these companies all recorded losses, with Meta’s shares falling most significantly with a minus of 1.6 percent.

The Telekom subsidiary T-Mobile US wants to settle user complaints after a major hacker attack with a payment of half a billion dollars. Stocks listed in the S&P 500 rose 1.6 percent.

Weber’s shares fell by almost 13 percent. In view of the uncertain market environment, the grill manufacturer had withdrawn its forecasts for net sales and adjusted operating profit. CEO Chris Scherzinger is also stepping down.

In contrast, the shares of Siga Technologies had reached a record high in the course of trading and closed around 29 percent in the plus. The vaccine manufacturer produces a vaccine against monkeypox. At the weekend, the World Health Organization declared the highest alert level for the virus.

The euro was trading at $1.0225. The European Central Bank had set the reference rate at 1.0236 (Friday: 1.0190) dollars. The dollar thus cost 0.9769 (0.9814) euros.

On the US bond market, the futures contract for ten-year Treasuries lost 0.12 percent to 119.75 points. In return, the yield on ten-year government bonds rose to 2.81 percent./la/he

— By Lutz Alexander, dpa-AFX —

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