NEW YORK (awp international) – Resurgent economic worries brought the recent recovery on the US stock market to a standstill again on Monday. Market participants once again referred to the fears of interest rates, inflation and recession, which are now part of everyday stock market life and which particularly affected the strongly growth-oriented technology stocks. Ahead of this week’s key inflation data release and the start of the US corporate accounting season, these concerns are once again gripping investors.
In addition, the focus on China dampened investors’ appetite for risk. The number of new infections there reached its highest level since the end of May. The authorities are talking about a very high risk, which raised further concerns in the market as Beijing remains committed to its zero-Covid strategy. Against this background, investors fear new supply bottlenecks if the government should impose lockdowns again to contain the virus.
In New York, the tech-heavy Nasdaq 100 fell 2.19 percent to 11,860.28 points. The market-wide S&P 500 fell by 1.15 percent to 3854.43 points. The leading index Dow Jones Industrial lost 0.52 percent to 31,173.84 points after a brief excursion into the profit zone.
In the past week, the most important US indices had recovered a bit. However, with the robust US jobs report presented on Friday, the momentum of stabilization has already ebbed away – because many stock market traders see this as confirming the expectation that the gates are wide open for a further significant tightening of US monetary policy. However, this also gives rise to fears that the monetary watchdogs may overshoot the target and thus damage the economy, and that equities will become less attractive compared to other asset classes.
“After the strong labor market figures, higher-than-expected consumer price inflation would increase the pressure on the US central bankers to continue to counter the price pressure with extensive interest rate hikes,” conclude the Postbank experts with a view to the inflation data due on Wednesday.
In terms of individual values, Twitter stocks were once again in the spotlight after billionaire and Tesla boss Elon Musk did not want to buy the short message service after all. Musk’s lawyers justified the withdrawal with allegedly insufficient information on the number of fake accounts. The company wants to push through the deal in court, the shares buckled 11.3 percent at the bottom of the S&P 500.
Tesla’s stocks were unable to benefit from the news, although they had recently suffered from the prospect that Musk would have to sell his own shares in the electric car maker to finance the Twitter deal. Instead, Tesla shares lost 6.6 percent. They were weighed down by the threat of recession and renewed production disruption in China.
Uber’s shares fell more than 5 percent. Internal documents from the transport service broker from 2013 to 2017 that have now come to light had given deeper insights into the company’s aggressive business practices at the time.
The euro came under pressure, closing at $1.0043 on Wall Street. The course was only just above parity. This means a one-to-one exchange ratio. The European Central Bank had set the reference rate at 1.0098 (Friday: 1.0163) dollars. The dollar thus cost 0.9903 (0.9840) euros. A major reason for the weakness of the euro is the fear of an energy crisis in Europe.
US government bonds benefited from the gloomy mood on the US stock market: The futures contract for ten-year Treasuries (T-Note Future) rose by 0.66 percent to 118.41 points. In return, the yield on ten-year government bonds fell to 2.99 percent./la/he
— By Lutz Alexander, dpa-AFX —
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