A trader works on the floor of the New York Stock Exchange (NYSE) in New York City, USA, June 22, 2022. REUTERS / Brendan McDermid
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- Consumer spending in the US in May rises moderately; higher inflation
- The S&P 500 headed into its worst first half since 1970
- Falling indices: Dow 0.72%, S&P 0.58%, Nasdaq 0.81%
June 30 (Reuters) – US stocks fell on Thursday, placing the Dow at its worst in six months since 1962, amid concerns that a stubborn search by central banks to control inflation is hampering growth world economic.
Fears about slowing growth and rising prices have hit markets, with concerns about the recession taking center stage as monetary policy makers around the world seek to aggressively raise lending costs. .
Federal Reserve Chairman Jerome Powell promised Wednesday that he will not allow the U.S. economy to fall into a “higher inflation regime,” even if that means raising interest rates to levels they set. at risk growth. Read more
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The Nasdaq Composite (.IXIC) fell below session lows, but was still forecast for its biggest drop during the first half, while the benchmark S&P 500 (.SPX) tracked its percentage drop largest from January to June since 1970.
The top three indices are on track to record their second consecutive quarterly drop for the first time since 2015.
Fed officials in recent days have set expectations for a second interest rate hike of 75 basis points in July, although economic data drew a sad picture for the American consumer.
“Until inflation happens significantly, which at this point will take, I think months, it will be difficult for the market to really find a bottom and start a rebound,” said Ross Mayfield, Baird’s investment strategy analyst .
Meanwhile, consumer spending, which accounts for more than two-thirds of U.S. economic activity, rose less than expected in May, indicating a warm rise in growth in the second quarter, while inflation held the upward trend. [nL1N2YH162]
“A lot of investors were expecting inflation data to really start to go down. But what we’re finding is that it’s a lot harder and that inflation data is going to stay high for longer and probably hasn’t reached its peak,” he said. Sam Stovall. , CFRA chief investment strategist.
Large-cap growth stocks, such as Microsoft Corp. (MSFT.O), Apple Inc. (AAPL.O), Amazon.com Inc. (AMZN.O) and Tesla Inc. (TSLA.O), fell between a 0, 5% and 2%, leading the day’s falls.
At 12:01 pm ET, the Dow Jones Industrial Average (.DJI) was down 224.38 points, or 0.72%, at 30,804.93, the S&P 500 (.SPX) was down 22.26 points, or 0 , 58%, to 3,796.57 and Nasda (. .IXIC) fell 90.17 points, 0.81%, to 11,087.72.
Looking ahead to the second half of the year, affected markets will continue to focus on inflation, unemployment and rising interest rates, along with their impact on corporate earnings.
“There’s a feeling that the earnings image will be the next shoe to come down and that downward revisions in earnings will catalyze another lower share in the market,” Mayair de Baird said.
Walgreens Boots Alliance Inc (WBA.O) fell 4.5% as the pharmacy chain maintained its year-over-year earnings forecast due to declining COVID vaccinations. Read more
The decline in emissions outnumbered those advanced for a ratio of 1.87 to 1 on the NYSE and 1.79 to 1 on the Nasdaq.
The S&P index recorded a new high of 52 weeks and 42 new lows, while the Nasdaq recorded 11 new highs and 332 new lows.
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Report by Shreyashi Sanyal and Amruta Khandekar in Bangalore; Additional report by Medha Singh; Editing by Arun Koyyur
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