NEW YORK (AP) — Stocks are opening lower again on Wall Street, continuing an area of weakness that wiped out much of the market’s gains in July and early August. The S&P 500 was down around 0.5% at the start of Thursday. The Nasdaq fell a little more, with technology companies taking some of the biggest losses. Nvidia fell after the chipmaker said the US government imposed new licensing requirements on its sales to China. The price of oil fell again amid fears the economy could slow. The benchmark US crude price has just completed its third month of decline.
THIS IS A BREAKING NEWS UPDATE. AP’s previous story follows below.
NEW YORK (AP) — Wall Street was poised to open trading with more losses Thursday as investors braced for higher interest rates and inflation concerns for the foreseeable future.
Dow Jones Industrial Average futures fell 0.3%, as did S&P 500 futures.
Major U.S. indexes have suffered four straight days of declines since Federal Reserve Chairman Jerome Powell said last Friday that the central bank will likely have to keep interest rates high enough to slow the economy “for some time. time” to push back the four-decade high. inflation.
Through Wednesday, the Dow Jones is down 2.4%, the S&P is down 2.5% and the Nasdaq is down 2.7%.
“At some point, central banks will discover that inflation remains high despite their interest rate hikes and they will stop,” said Clifford Bennett, chief economist at ACY Securities. “Unfortunately, for the Main Street economy, that point is too far in the distance. It’s hard to see a near-term end to heightened consumer and business caution across the Europe, China and the United States”
The latest decline in equities came as Treasury yields rose broadly. The 10-year Treasury yield, which influences interest rates on mortgages and other consumer loans, rose to 3.2% from 3.11% on Tuesday evening.
Bond yields rose alongside expectations of higher interest rates, which the Federal Reserve raised in an effort to crush the highest inflation in decades.
The last time equities mounted a big rally was in July and early August, when bond yields hit their highs as expectations for higher rates eased. Rising interest rates have also hurt investment prices, especially for more expensive stocks such as technology companies.
Traders are now trying to better understand how far and how fast the Fed rate hikes will go. The Fed has already raised interest rates four times this year and is expected to raise short-term rates another 0.75 percentage points at its September meeting, according to CME Group.
It’s much the same in Europe, where inflation in countries using the euro hit a record 9.1% in August, fueled by soaring energy prices mainly due to war. from Russia to Ukraine.
As of noon on Thursday, France’s CAC 40 fell 1.2%, while Germany’s DAX slipped 1.1% and Britain’s FTSE 100 fell 1.3%.
Benchmarks ended lower in Asia. Japan’s benchmark Nikkei 225 fell 1.5% to end at 27,661.47. Australia’s S&P/ASX 200 fell 2.0% to 6,845.60. The South Korean Kospi fell 2.3% to 2,415.61. Hong Kong’s Hang Seng fell 1.8% to 19,597.31, while the Shanghai Composite fell 0.5% to 3,184.98. Oil prices have fallen.
The Nikkei’s fall came despite signs of improvement in the Japanese economy. A Finance Ministry study of corporate financial statements for April-June showed a 17.6% improvement over the same period a year earlier.
In energy trading, benchmark U.S. crude fell $1.29 to $88.26 a barrel. Brent crude, the international standard, slipped $1.37 to $94.27 a barrel.
In currency trading, the US dollar fell from 139.04 yen to 139.23 yen. The Euro traded at $1.0008, down from $1.0054.
Yuri Kageyama, Associated Press