US Stocks Sink Further as Markets Fall Around the World | Financial markets news

Investors are increasingly concerned about inflation, the war in Ukraine and the COVID-19 lockdowns in China.

For Bloomberg

Stocks fell to a 13-month low in a widespread sell-off amid concerns about the Federal Reserve’s ability to rein in inflation spirals without tipping the economy into recession.

The decline in the S&P 500 exceeded 3%, while the Treasury curve steepened, with the gap between 5-year and 30-year rates reaching its widest level since March. Investors are increasingly concerned about the limits of the Fed’s policy at a time when supply chain disruptions pose a significant threat to inflation amid a devastating war in Ukraine and China’s lockdowns for Covid. Data on Monday showed that US consumer project prices in three years will be higher compared with a month ago, a worrying sign for officials trying to keep long-term expectations anchored.

Pandemic-era stars bore the brunt of the selloff, with Cathie Wood’s flagship exchange-traded fund sinking about 10% and an ETF tracking newly public companies lower since the start of the pandemic. . Bitcoin dipped below $32,000, falling more than 50% from its all-time high. The rout also extended to energy producers, easily the market’s strongest sector in 2022. The group tumbled more than 8% as crude plunged. Big tech was not spared, with the likes of Tesla Inc., Amazon.com Inc. and Nvidia Corp. down by at least 5%. The Cboe volatility index spiked to its highest level in two months.

Traders will be watching a slew of central bank speakers this week after Chairman Jerome Powell downplayed the option of a 75 basis point rate hike on Wednesday. Fed Bank of Atlanta President Raphael Bostic told Bloomberg Television that he favors policymakers continuing to raise rates in half-point increments rather than doing anything bigger. In a subsequent interview with Reuters broadcast on Twitter, Bostic added that while he saw little chance of a 75 basis point hike in the coming months, he “isn’t taking anything off the table.”

Wednesday’s April Consumer Price Index report is the highlight of a quiet week for economic releases. Inflation is projected to have moderated both monthly and annually, reflecting in part a drop in gasoline prices that have since recovered. While inflation likely peaked in March at 8.5%, the highest in four decades, price pressures are expected to remain elevated, keeping Fed officials on track to steadily raise utility costs. loans in the coming months.

High inflation readings, a slowing economy and the Federal Reserve’s aggressive tightening to curb rising prices have weighed on risk appetite and valuations. Even if an outright recession is averted, the outlook for US stocks isn’t particularly bright, according to strategists at Goldman Sachs Group Inc.

“Swings will remain large until the path of inflation becomes clearer,” the strategists led by David Kostin wrote in a note to clients, adding that “tighter financial conditions and poor market liquidity make it difficult to argue for of a similarly sized short-term rally. to the end of March.”

Here are key events to watch this week:

  • Cleveland Fed President Loretta Mester, Atlanta Fed President Raphael Bostic, New York Fed President John Williams and Fed Governor Christopher Waller speak Tuesday.
  • Atlanta Fed President Raphael Bostic speaks Wednesday
  • US CPI WednesdayEIA Crude Oil Inventory Report Wednesday
  • San Francisco Fed President Mary Daly speaks Thursday
  • US PPI Initial Jobless Claims Thursday
  • University of Michigan Consumer Sentiment, Friday

Some of the main movements in the markets:

Stocks

  • The S&P 500 fell 3.2% at 4 p.m. New York time.
  • The Nasdaq 100 fell 4%
  • The Dow Jones Industrial Average fell 2%
  • MSCI World Index fell 3.1%

coins

  • The Bloomberg Dollar Spot Index rose 0.3%
  • Euro little changed at $1.0559
  • Sterling fell 0.1% to $1.2333
  • The Japanese yen rose 0.3% to 130.22 per dollar.

Captivity

  • The 10-year Treasury bond yield decreased 10 basis points to 3.03%
  • Germany’s 10-year yield fell four basis points to 1.09%
  • Britain’s 10-year yield fell four basis points to 1.96%

raw Materials

  • West Texas Intermediate crude fell 6.8% to $102.28 a barrel.
  • Gold futures fell 1.6% to $1,852.70 an ounce.

–With the assistance of Sunil Jagtiani, Srinivasan Sivabalan, John Viljoen and Vildana Hajric.

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