NEW YORK (dpa-AFX) – On the US stock market, bargain hunters ultimately ensured a recovery after the price slide on Friday. In particular, the volatile technology stocks gained again on Monday. In a highly nervous trading session, economic data on the mood in industry initially provided some relief, before the significant rise in yields on the bond market fueled investors’ fears of interest rates again and pushed the most important indices significantly into the red. Ten-year US bonds returned three percent in trading for the first time since December 2018.
The leading index Dow Jones Industrial closed 0.26 percent higher at 33,061.50 points after temporarily falling to the level at the end of February. The market-wide S&P 500 rose 0.57 percent to 4155.38 points. The tech-heavy Nasdaq 100 ended up up 1.72 percent to 13,075.85 points.
Meanwhile, investor sentiment remains cautious ahead of the Federal Reserve’s interest rate decision on Wednesday. When the Fed announces its monetary policy decisions, investors are currently expecting a 0.5 percentage point hike in the key interest rate. “But beyond that, investors are waiting for new insights into the additional steps to be taken to combat inflation,” said the experts at the private bank Metzler, looking beyond the concrete decisions. According to experts, the Fed is only at the beginning of a rate hike cycle. In an environment of rising interest rates, stocks become less attractive than fixed income securities.
Economically, the corona lockdowns in China and the ongoing war in Ukraine remain major international concerns for investors. This is one of the reasons why fresh economic data from the USA was particularly in focus on Monday. The mood in US industry has surprisingly deteriorated, as shown by the unexpected decline in the ISM Purchasing Managers’ Index for April. This barometer for US industry, which serves as a gauge for overall economic growth, is still well above the growth threshold of 50 points.
Analyst Ralf Runde from Landesbank Hessen-Thüringen drew a rather positive conclusion: “The important, national mood barometer for US industry is solid, although expectations were clearly missed.” Since the index is still clearly in the expansion zone, the interest rate expectations regarding the Fed will probably not be shaken this week. However, it is questionable whether the interest rate fantasies that go beyond this will be pushed through again. “A whole series of sharp rate hikes is already priced in,” the expert continued.
Among the weakest stocks in the S&P 500, Moody’s shares fell almost five percent. The financial rating provider missed expectations with its profit in the first quarter and reduced the annual outlook.
In contrast, Activision Blizzard’s stocks were among the biggest winners in the index with a plus of a good three percent. Here it was pointed out that investor legend Warren Buffett now holds ten percent of the computer games group.
Buffett’s Berkshire Hathaway B shares fell 1.4 percent. This had only kept the operating profit constant at the beginning of the year due to larger burdens in parts of the insurance business. Increased damage claims at the primary insurer Geico depressed the results in this area.
The euro cost $1.0504. The European Central Bank had previously set the reference rate at $1.0524 (Friday $1.0540). The dollar thus cost 0.9502 (0.9487) euros.
The futures contract for ten-year Treasuries (T-Note future) fell by 0.64 percent to 118.39 points. In return, the yield on ten-year government bonds rose to 2.99 percent most recently./la/he
By Lutz Alexander, dpa-AFX
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