NEW YORK (awp international) – Wall Street extended its recent losses on Monday. At the start of the new week, fears about the economy persisted due to restrictive monetary policy signals. Interest-sensitive technology stocks have come under particular pressure.
The main Dow Jones Industrial Index fell 0.49% to 32,757.54 points. The market-wide S&P 500 fell 0.90% to 3817.66 points and the tech-savvy Nasdaq 100 index fell 1.42% to 11,084.59 points.
Stockbrokers continue to expect the US Federal Reserve to significantly raise its key interest rates in the coming year. While the Fed has slowed its rate of tightening a bit recently, it has made it clear that it intends to continue its fight against inflation with determination. However, rising interest rates can shut down the economy because it makes it more expensive for businesses and individuals to borrow.
Recession fears have recently taken hold, wrote market analyst Edward Moya of trading house Oanda. Earlier in the week, bond yields skyrocketed around the world after testimony from former head of the influential Federal Reserve Bank of New York, William Dudley, attracted attention. He dismissed expectations that the Fed would cave in its fight against inflation as soon as the unemployment rate started to rise.
Among the individual stocks, the focus was on Tesla shares. The electric car maker’s papers had initially halted their recent slide before they finally slipped into the red as part of the overall weak market and lost 0.2%. The tentative recovery was sparked by speculation that Tesla founder Elon Musk could resign as head of short-messaging service Twitter.
In a Twitter poll he initiated, the majority of users voted in favor of his resignation. Musk had previously assured that he would abide by the result of the vote. Market analyst Susannah Streeter of investment firm Hargreaves Landsdown sees the hope behind the resignation that Musk will finally pay more attention to the electric car maker. Because Tesla urgently needs it at a time when the company is shaken by expectations of falling demand in China.
Meta’s shares are down more than four percent. According to the preliminary opinion of the EU competition authorities, the Internet company violates European antitrust rules by distorting competition on the Facebook Marketplace. Specifically, the EU Commission complains that Meta unilaterally imposes unfair trading terms on competing online ad services that advertise on Facebook or Instagram.
At the end of the Dow, shares of entertainment group Walt Disney dropped 4.8%. The Wall Street Journal reported that the film, Avatar: The Way of Water, fell short of expectations when it opened in US theaters, while ticket sales in China were hampered by concerns over Covid-19.
The euro last stayed above 1.06 US dollars and was quoted at 1.0604 dollars. Representatives of the European Central Bank (ECB) had confirmed their intention to keep rate hikes high. The ECB had set the key rate at 1.0598 (Friday: 1.0619) dollars. The dollar therefore cost 0.9436 (0.9417) euros.
In the bond market, the US 10-year bond futures contract (T-Note Future) fell 0.61 percent to 114.11 points. The yield on ten-year government bonds rose to 3.59 per cent/w/h
— By Lutz Alexander, dpa-AFX —
