NEW YORK (awp international) – Unexpectedly high inflation caused significant price losses on US stock exchanges on Tuesday. Especially among tech stocks, which are considered particularly interest-dependent, there was a major disappointment after the last four days of earnings that US inflation has only weakened slightly. Investors see this as an indication that the pressure on the US Federal Reserve with its tightening of monetary policy is not really easing and that a recession is still looming.
The high-tech Nasdaq 100 was the most down, down 5.54% to 12,033.62 points. The S&P 500 at the market level lost 4.32% to 3932.69 points. The Dow Jones Industrial fared a little better. It fell 3.94 percent to 31,104.97 points. The price gains of the last few days have disappeared in one fell swoop.
Parallel to the steeply falling equity markets, the US dollar and capital market interest rates in the US have risen substantially after disappointing inflation data, suggesting that investors expect further significant interest rate hikes from Fed. This is in line with ING Bank’s expectations of another 0.75 percentage point rate hike next week.
ING economist James Knightley is concerned about rising core inflation, which the Fed considers particularly important. Commerzbank economist Bernd Weidensteiner also draws a clear mandate from the US monetary authorities from the data: “The Fed must continue to press the brakes, even at the cost of a possible recession.”
Shares of Oracle have temporarily resisted market weakness, but recently they too fell 1.4%. The software group impressed in the first quarter with the level of sales growth, with investors appreciating the momentum in the cloud business. However, the euphoria was held back by the fact that higher operating costs caused profits to plummet by more than a third.
Meanwhile, fitness specialist Peloton is not resting. Two other co-founders are leaving the company, which was hugely popular during the Crown crisis: longtime company director John Foley and legal director Hisao Kushi. Investors were shocked: newspapers fell ten percent after the recent recovery.
On the Nasdaq exchange, the values of the chips and cards of the mother of Facebook Meta were particularly negative: among the losers in the former sector were the stocks of AMD and Nvidia with at least nine percent lower. Meta also suffered such a large discount, approaching the latest lows seen since April 2020.
Twitter newspapers, on the other hand, developed positively, gaining 0.8 percent. On the short message service, the dispute with Elon Musk over his takeover continues: on Tuesday the shareholders approved it in an extraordinary meeting, even if Musk declared it invalid. In October, a court now needs to clarify whether it can get out of the deal. Currently at $ 42, the price is well below the offered price of $ 54.20.
The euro was dampened by the inflation figure. The common currency was last paid out at $ 0.9973, returning below par. The European Central Bank had previously set the reference rate at 1.0175 (previous day: 1.0155) dollars. The dollar therefore cost € 0.9828.
US government bonds posted significant price losses on Tuesday. The 10-year Treasury futures contract fell 0.58% to 114.94 points. On the other hand, the yield on government bonds with corresponding maturities rose to 3.42%. / Tih / jha /
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