NEW YORK (dpa-AFX) – Further rising yields on the bond market and the associated economic concerns put pressure on interest-sensitive technology stocks on Friday. In contrast, the blue chip indices recovered somewhat from their recent losses after a mixed start.
The leading index Dow Jones Industrial rose by 0.68 percent to 34,819.63 points. On a weekly basis, this indicates a slight plus.
The broader S&P 500 was up 0.06 percent on Friday to 4503.05 points. The technology-heavy Nasdaq 100 recently fell by 0.97 percent to 14,391.02 points after losing almost 1.5 percent in the meantime.
The bond markets are currently dominated by monetary policy in particular. A series of rate hikes is expected from the Federal Reserve this year to combat high inflation. In addition, the Fed wants to start reducing its trillion-dollar balance sheet as soon as possible.
Both developments are causing interest rates to rise sharply on the capital markets. Risky assets like stocks suffer as fixed income bonds become increasingly attractive. In addition, there are fears that sharply rising interest rates will make loans significantly more expensive for companies and consumers, thereby slowing down economic growth.
The Swiss bank Credit Suisse advises equities despite rising inflation and tighter monetary policy. “The world economy should continue to grow in the coming months,” was the reasoning. In addition, investors have so far been “positioned cautiously”, which means upside potential, at least in the short term.
At the top of the Dow, Home Depot’s shares rose by around three percent. The chief financial officer of the hardware store chain made a positive statement at an analysts’ conference, said stockbrokers. Accordingly, the investments made between 2018 and 2020 allowed the company to increase its market share more than originally expected.
Analyst comments also provided some movement. According to a skeptical study by Credit Suisse, Alcoa shares fell by more than one percent. The aluminum producer is struggling with inflationary pressures and at the same time investments should pick up to meet carbon reduction targets, analyst Curt Woodworth wrote. Above that, aluminum prices should soon have peaked and then fall again./la/he
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