NEW YORK (dpa-AFX) – Concerns about interest rates and the economy continue to weigh on the US stock exchanges. On Thursday, the most important indices had initially recovered somewhat from their previous day’s losses, but as trading progressed, investors lost courage again. Once again, a central bank representative had pointed out the need for additional interest rate hikes in the fight against high inflation.
The leading index Dow Jones Industrial lost 0.73 percent to 33,699.88 points. The market-wide S&P 500 fell 0.88 percent to 4081.50 points. The tech-heavy Nasdaq 100 fell 0.91 percent to 12381.17 points. The changeable stock market trend so far this week thus continued.
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Meanwhile, data from the job market showed that the number of weekly initial jobless claims was slightly higher than experts had predicted. The data is considered a timely indicator for the US job market. The Fed takes the local situation into account in its monetary policy. For the past year, it has been trying to get the high inflation under control with significant interest rate hikes. Most recently, the monetary watchdogs had reduced the pace of interest rate hikes and at the beginning of the month only decided on a small rate hike of 0.25 percentage points.
The interest rate issue has occupied investors for a long time and so also this week. Easing fears of inflation boosted prices at times, while concerns about further increases in interest rates slowed them down.
The most recent data from the labor market now speak more for falling inflationary pressure. Richmond Regional Reserve Bank Governor Thomas Barkin nonetheless joined in the chorus of policymakers on Thursday, who had recently signaled that the Fed still has a long way to go to dampen prices. Barkin said it was important to continue raising interest rates to ensure inflation got back towards the 2% target.
The options market is currently expecting the key interest rate to rise to six percent. This sentiment was reflected in the US Treasury market, where the two-year yield had at one point outperformed the 10-year by the widest margin since the early 1980s. Parts of the US yield curve are currently inverted. That is, interest rates on shorter-dated securities are higher than interest rates on longer-dated securities. Experts derive recession risks from this constellation.
Among the individual stocks, all eyes were on Walt Disney. Despite good business in the past quarter, the entertainment giant plans to make significant staff cuts. Because the entertainment group lost subscribers to its most important streaming service Disney + after significant price increases. Shares gave up early gains and ended down more than 1 percent.
The shares of the toy manufacturer Mattel were more affected by quarterly figures and forecasts with minus 10.7 percent. Investors were disappointed by the outlook here. Shares in medical technology company Baxter slipped 12.1 percent and flavor maker International Flavors & Fragrances at the S&P 500 end 18.8 percent.
Conversely, investors in casino and hotel operator MGM Resorts and industry peer Wynn Resorts were both pleased with strong business numbers. The shares shot up by a good six and almost five percent respectively.
The euro was last listed at 1.0733 US dollars. The European Central Bank had set the reference rate at 1.0771 (Wednesday: 1.0735) dollars. The dollar thus cost 0.9284 (0.9315) euros.
On the US bond market, the futures contract for ten-year bonds (T-Note future) fell by 0.18 percent to 113.20 points. In return, the yield on ten-year government bonds rose to 3.66 percent./la/he
— By Lutz Alexander, dpa-AFX —
