NEW YORK (dpa-AFX) – After a failed start to the week, investors continued to shun US stocks on Tuesday. Fears of a further spiral in interest rates are currently gripping the markets: the main US index, the Dow Jones Industrial, fell below the 21-day line for the first time since October, which is a popular indicator of short-term trend among investors. Meanwhile it was at its lowest level since mid-November.
The Dow ended up falling 1.03% to 33,596.34 points. The other indices fell even more significantly: the market-wide S&P 500 lost 1.44% to 3941.26 points. Due to the dampening effect of the growth of high interest rates, the technology-heavy Nasdaq 100 fell particularly sharply by 2.01% to 11,549.69 points. Shares of tech giants such as Apple, Alphabet, Netflix and Amazon suffered losses of between 2.3 and 3.0%.
Investors have continued to digest the relatively good US economic data released in recent days. According to investment strategist Mark Haefele of UBS Wealth Management, news that seems good at first glance is ultimately interpreted as bad news for stocks. He underscored the conclusion that the US Federal Reserve will not ease its monetary policy again anytime soon.
According to Haefele, while there are signs of a slowdown in inflation, it is not on track to meet the 2% target due to wage growth. “We believe this could lead to the Fed raising rates above the 5% terminal rate currently quoted in the markets,” she said. However, looking ahead to next week, he expects the Fed to slow the pace of rate hikes to 0.50 percentage point, as widely expected.
Among the tech values, the Meta share was particularly negative, slipping by 6.8 percent. A circle report that appeared in the “Wall Street Journal” weighed on investor sentiment, according to which the European Union wants to ban Facebook and Instagram owners from requesting user consent to receive personalized advertising. If that were to happen, it could limit associated marketing potential, he said.
In the small-cap segment, shares in arms group Textron performed well with an increase of 5.3 percent. The company has been awarded the contract to deliver a new generation of attack helicopters to the United States. Opponent Lockheed Martin fell behind, whose shares fell 1.4%.
Another topic of conversation was a proposed takeover: Vivint Smart Home’s shares rose by nearly a third as the smart home technology maker received a takeover bid from energy supplier NRG Energy. Vivint’s price approached the $12 a share on offer to pennies. However, NRG shareholders didn’t like the plan, the price here fell by 15%.
The euro fell slightly again on Tuesday. Most recently, the common currency cost 1.0466 US dollars. Meanwhile, the European Central Bank set the key rate even higher at 1.0516 (Mon: 1.0587) dollars. The dollar therefore cost 0.9509 (0.9446) euros.
Unlike stock prices, US Treasuries rallied slightly on Tuesday. The futures contract for 10-year bonds recently increased by 0.41% to 114.06 points. In return, the ten-year yield fell to 3.52 per cent/tih/meas
— By Timo Hausdorf, dpa-AFX —
