NEW YORK (dpa-AFX) – Rising interest rates on the US bond market and surprisingly weak data from the domestic labor market hit the US stock exchanges on Wednesday. Even the best-known Wall Street index, the Dow Jones Industrial, was no longer able to maintain positive growth at the end of the trading day and ultimately fell 0.39 percent to 31,270.09 points.
The market-wide S&P 500 fell by 1.31 percent to 3819.72 points and the Nasdaq 100 even dropped by 2.88 percent to 12,683.33 points. By contrast, US government bond yields rose again significantly. The futures contract for ten-year government bonds (T-Note-Future) fell by a significant 0.45 percent to 133.10 points. The return rose to 1.47 percent. In the past week, however, it had increased even more and reached a one-year high of around 1.55 percent.
The impression that the ups and downs in capital market rates could continue has been reinforced by this current development. Rising growth and inflation expectations in the USA are considered to be the trigger. Equity investors are increasingly concerned that as interest rates rise, bonds are once again becoming more attractive as an investment alternative. Refinancing can also become more expensive for companies.
There was also negative news for the stock market with regard to employment in the US private sector. According to the labor market service provider ADP, employment rose significantly less than expected in February. Now there is concern that this could be a negative omen for the US government’s official labor market report due on Friday.
These two negative developments stand in the way of the economic optimism that is emanating from the rapidly advancing vaccination campaign in the USA. According to President Joe Biden, enough vaccine will be available for all adults “by the end of May”, after a time frame of up to the end of July had been targeted. The Fed also said in the economic report that the economy was optimistic in view of the vaccination campaign. Until mid-February, however, the US economy grew only moderately./ck/men
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