US Stock Exchanges Expected to Remain Lethargic Following Recent Price Losses
NEW YORK (dpa-AFX) – The US stock exchanges are likely to experience a lack of movement in the wake of recent price losses on Monday. Investors are exercising caution due to ongoing concerns about the economy and interest rates, as well as recent events in Russia.
In the absence of significant economic and company news, broker IG has rated the leading index Dow Jones Industrial almost unchanged at 33,721 points, three quarters of an hour before the start of trading. Similarly, the technology-heavy Nasdaq 100 remained unmoved at 14,894 points. Last Friday, the Dow closed lower for the fifth consecutive day, marking its biggest weekly loss since early March.
Last week, several central banks raised their key interest rates, some more significantly than expected, and indicated further increases. The US Federal Reserve has also signaled that despite the interest rate pause in June, there is still room for further adjustments.
The short-lived uprising of the Russian mercenary group Wagner, which has played a decisive role in the war against Ukraine, has put President Vladimir Putin’s authority to a severe test and raised questions about the future development of the war, according to a Commerzbank comment.
IBM’s shares experienced a pre-market loss of 0.3 percent with little volume after the US group announced its intention to strengthen its IT automation business through the multi-billion acquisition of software provider Apptio. The US company will be acquired by the previous owner Vista Equity Partners for $4.6 billion in cash.
On the other hand, electric car manufacturers Tesla and Lucid witnessed more significant price swings. Lucid’s shares rose by 10.6 percent following an agreement with British sports car maker Aston Martin for high-performance electric vehicles. As part of the agreement, Lucid will acquire a nearly four percent stake in Aston Martin.
In contrast, Tesla shares are expected to face further price losses of 1.6 percent, reaching $252.55, after experiencing profit-taking following a high since late September. This development was influenced by a downgrading of Goldman Sachs. The US investment bank raised the price target from $185 to $248. However, considering the strong price development since the beginning of the year, Goldman Sachs canceled its buy vote and now advises a neutral stance. Analyst Mark Delaney justified his view by stating that the shares better reflect his long-term expectations for the company. He also highlighted the challenging pricing environment for new vehicles, which is likely to further impact the gross margin this year.
Overall, the US stock exchanges are expected to remain lethargic as investors navigate the uncertainties surrounding the economy, interest rates, and geopolitical events.
What factors, including concerns about inflation and potential future rate hikes, are contributing to the lackluster performance of US stock exchanges
Concern about inflation and the potential need for future rate hikes. These interest rate concerns, along with worries about the global economy and tensions with Russia, are dampening investor sentiment and contributing to the lackluster performance of US stock exchanges.
Without any major economic or company news to drive the markets, traders are adopting a cautious approach. IG, a broker, predicts that the Dow Jones Industrial Average will remain virtually unchanged at 33,721 points, while the Nasdaq 100 is expected to stagnate at 14,894 points.
The Dow Jones Industrial Average closed lower for the fifth consecutive day last Friday, experiencing its largest weekly loss since March. This decline reflects investor unease and lack of confidence in the market amid ongoing uncertainties.
One significant factor impacting investor sentiment is the recent interest rate hikes by various central banks. The magnitude of these rate increases, along with indications of further hikes, has raised concerns about the potential impact on economic growth and corporate earnings.
Furthermore, the US Federal Reserve has hinted that despite the pause in interest rate hikes in June, there remains apprehension regarding inflationary pressures and the possibility of future rate increases.
Combined with ongoing geopolitical tensions, such as those with Russia, these factors are contributing to a lethargic and cautious market environment. Until there is more clarity and positive news regarding the economy, interest rates, and global events, US stock exchanges are expected to remain sluggish and lack significant movement.
