In the middle of the week, both indices – especially the technology-heavy selection index – closed with strong gains after the significant interest rate hike by the US Federal Reserve, albeit below their daily highs. The 0.75 percentage point hike was not unduly surprising, although it was the largest rate hike in almost 30 years – many observers had predicted an even larger one.
With their tightening of monetary policy, the US monetary authorities want to combat high inflation, but are also fueling fears of a recession. Fed Chairman Jerome Powell emphasized that such a high rate hike is “naturally unusual” and not usual. At the same time, he announced another increase of 0.5 or 0.75 points for the end of July. It is a balancing act for the Fed to dampen high inflation while not slowing down economic growth too much.
On the other hand, it was unexpected that the Swiss central bank SNB followed the American example with a significant interest rate hike of 0.5 percentage points. This could further fuel worries about global economic growth and thus turn the mood around again, the market said. Meanwhile, the Bank of England’s interest rate hike of 0.25 percentage points was as expected.
On the US stock exchanges, Tesla was in focus with a pre-market price decline of almost four percent. Apparently, investors resented the electric car maker for raising its vehicle prices in the domestic US market.
Shares in Abbott Laboratories fell more than two percent after the company reported a weather-related shutdown of baby food production at a US site.
McDonald’s fell by around one percent, which means that the share held up comparatively well in the weakly expected market. The fast food chain pays the sum of 1.25 billion euros in France to avoid investigations into tax fraud.
Meanwhile, Twitter papers rose by almost two percent. According to a report by the “Wall Street Journal”, Tesla boss Elon Musk is likely to confirm his interest in taking over the short message service in an upcoming meeting with employees
(AWP)
–
