Bloomberg News reports that the US stocks dropped but were found trading off sessions lows, as the investors are weighing risks that inflation and the central bank’s hawkish policy are eroding the corporate earnings and the growth in the economy.
There were paring losses by the S&P 500 index amidst the profits in the defensive segments like consumer staples and healthcare after sinking the benchmark to the lowest intraday level since November 2020. The Nasdaq 100 did not perform up to the mark, sliding by 1%. Meta Platforms Inc dropped with the other bigger tech names sensitive to the surging rates. With yields, Treasuries were mixed on the short end of the curve, dropping from the multiplayer highs.
The mood remains delicate following a four-day loss that wiped out $1.6 trillion from the S&P 500 Index. The US inflation data on Thursday might seal the same for another 75 basis point interest rate surge without a massive shortfall. It is also being observed that the swaps market is fully pricing in on the next Federal Reserve meeting, and the officials have not indicated pausing their rate surging cycle in the future.
Bloomberg News reports that the strategists are embracing weaker profits against a wide array of warnings related to rising global recession risks. The International Monetary Fund joined the refrain, thereby warning of an outlook worsening as the measures for curbing inflation might add to the existing damage due to the ongoing Russian and Ukrainian war and slowdown in China. Big US banks are kicking off the 3rd quarter earnings season in earnest later in the week.
Two-year Treasury yields dropped to around 4.27% after hitting previously the highest since 2007. The 30-year yield briefly touched a fresh 2014 high in the US session.
There is turbulence in UK bond markets which was found easing on Tuesday as the Bank of England was compelled to expand the emergency efforts for tackling what it referred to as the “fire-sale dynamics.”
In the meantime, Russian President Vladimir Putin was found threatening more missile attacks on Ukraine after hitting Kyiv and the adjoining cities in the worst barrage strike ever since the war started.
With the growth across the world under tremendous pressure, the US oil futures were tumbling by about 2%, preceding more of the 17% rally of the previous week.
