Business

Dow drops more than 500 points as Fed officials point to more rate hikes, China bucks the market


US stocks tumbled on Monday as protests in China increased risks to global growth and Federal Reserve policymakers said more rate hikes were needed to keep inflation under control. broadcast.

How are stocks trading?
  • The Dow Jones Industrial Average fell 523 points, or 1.5%, at 33,824, near a session low.

  • S&P500
    SPX

    fell 68 points, or 1.7%, to 3,958.

  • The Nasdaq Composite fell 195 points, or 1.7%, to 11,031.

US stocks recorded weekly gains last week, the second time in three weeks. The Dow rose 1.8 percent, the S&P 500 gained 1.5 percent and the Nasdaq gained 0.7 percent.

What is driving the market?

Wall Street started the week in an upbeat mood as traders absorbed the impact of the unrest in China and assessed two Fed officials’ comments on interest rates on Monday.

Fed President St. Louis James Bullard told MarketWatch that he favors more aggressive rate hikes to curb inflation and that the central bank will likely need to keep rates above 5% in 2024. Meanwhile, his colleague. John WilliamPresident of the New York Fed, said the US unemployment rate could soar as high as 5% next year, compared with 3.7% in October, due to a series of interest rate hikes by the central bank.

Overseas, Hong Kong’s Hang Seng Index
HK:HSI

closed down 1.6% and most equity indexes across Asia also fell, with the exception of India, on concerns about unrest in China. Those concerns also spill over into commodity markets, where West Texas Intermediate crude for January delivery
CLF23

quickly fell below $74 a barrel before recovery and settles at $77.24 a barrel on the New York Mercantile Exchange. Meanwhile, the price of copper HG00 fell 0.9 percent at $3,594 a pound.

“What everyone is worried about is the possibility that the protests in China could spread and whether the population will reach a breaking point,” said Derek Tang, an economist at Monetary Policy Analysis in Washington. or not”. “At the same time, the Fed talk is picking up and the message is there will be more hikes. So investors don’t find relief.”

Analysts say signs that economic activity in China will continue to be disrupted by protests or by additional anti-COVID measures will likely continue to weigh on commodity prices. chemical. Meanwhile, concerns about global growth supported the government bond market early Monday, as 10-year yields fell.
BX:TMUBMUSD10Y

was briefly traded at its lowest level since October.

Susannah Streeter, senior investment and market analyst at Hargreaves Lansdown, said the unprecedented wave of protests in China “has caused waves of uncertainty across financial markets, as concerns mount increasing impact on the world’s second-largest economy”. “As protests spread across the country from Beijing to Xinjiang and Shanghai, reflecting growing anger over the Covid-free policy, the need for a sustainable recovery across the vast country seems to even further.”

But the news isn’t bad: Power Report Black Friday sale online helped boost shares of Amazon.com Inc.
AMZN,

up 0.6%.

Investors can expect more news on the health of the US economy in what will be a busy week for US economic data: This weekend, investors will get Get the ADP jobs report, then the November jobs report. Revised third-quarter gross domestic product data will be released on Wednesday, along with the Fed’s Beige Book report. Federal Reserve Chairman Jerome Powell will give a public speech on Wednesday and a closely watched inflation gauge will be available on Thursday.

Read: “We see major equity markets down 25% from slightly higher levels today,” Deutsche Bank said.

One-stock movers

Jamie Chisholm contributed to this article.

news7f

News7F: Update the world's latest breaking news online of the day, breaking news, politics, society today, international mainstream news .Updated news 24/7: Entertainment, Sports...at the World everyday world. Hot news, images, video clips that are updated quickly and reliably

Related Articles

Back to top button