NEW YORK (awp international) – Uncertainty among Wall Street and Nasdaq investors is high amid strong inflation and ahead of expected monetary tightening by the US Federal Reserve (Fed). That was felt again on Friday. After a friendly start, the most important indices turned negative. The high-growth technology stocks were particularly weak once again.
Market participants are currently speculating feverishly about possible faster and more significant interest rate hikes, after the highest inflation rate for a good 40 years was published the day before.
The Wall Street index Dow Jones Industrial lost around two hours before the close of trading 1.17 percent to 34,829.65 points. The weekly plus at the start of trading on this day has thus currently turned into a weekly minus of 0.7 percent.
The S&P 500 index, which covers the broad market, recently fell by 1.45 percent to 4438.85 points after a stable course. The technology index Nasdaq 100 fell 2.20 percent to 14,382.50 points, which would mean a loss of just over 2 percent for the week.
The day before, a surprise price increase of 7.5 percent had been published for January. The Fed’s inflation target is just 2 percent. The monetary watchdogs therefore signaled an initial key interest rate hike in March, despite the still rampant corona pandemic, and in view of the current data there is growing pressure to act. This was also made clear on Thursday by the President of the Federal Reserve Bank of St. Louis, James Bullard, with his statement that he was in favor of a key interest rate hike of a full percentage point by July.
Corporate news was a bit thinner ahead of the weekend. The sporting goods manufacturer Under Armor scared investors with its business figures. The share fell by a little more than ten percent, the Nike competitor suffered from declining results in the Christmas quarter. The increased sales target for the current quarter did not help either.
Shares in Expedia turned negative after a record high of almost $210.50 and lost 2.5 percent. However, the latest interim report from the online travel company was strong: Despite the pandemic, the company managed to jump back into the profit zone. The British bank Barclays and its Swiss competitor Credit Suisse then raised their price targets for the share and confirmed their buy recommendations. Since the beginning of the year there has already been a price increase of around seven percent – the Nasdaq 100 has lost around twelve percent in the same period.
The Davita shares gave up their gains, but remained quite stable at minus 0.1 percent in the weak overall market. The dialysis specialist exceeded analyst estimates with its increase in earnings and sales in the past quarter./ck/he
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