Wall Street stocks fell on Friday as new data revealed that US consumer sentiment fell to its lowest level this year, raising fears the domestic economy is rapidly slowing.
Wall Street’s benchmark, the S&P 500, reversed earlier gains, trading down 0.7%, while the Nasdaq Composite fell 0.9%.
The moves follow a preliminary reading of the University of Michigan’s consumer sentiment index, which fell to 57.7, missing economists’ expectations that it would stay close to April’s reading of 63.5. of the participants worries have increased along with negative economic news, including the debt ceiling crisis.
Also, the US regional banking sector spooked investors again as lender PacWest Bancorp lost 1.3%. A day earlier, the bank had lost 23% after the bank announced it lost nearly a tenth of its deposits in the first week of May. The KBW regional banking index fell 0.5%, indicating lingering concerns about the market’s profitability.
Investor sentiment is being influenced by economic data, with traders looking for signs that the Federal Reserve has made progress in cooling the US economy and reducing inflation, and may be nearing the end of its higher interest rate policy. elevated.
Earlier this week, jobless claims data signaled that the Fed’s string of aggressive rate hikes was having an effect. The tech-heavy Nasdaq Composite has gained nearly 20% so far this year, far outpacing the S&P 500’s 8% gain.
“The anticipation of that peak [of interest rate rises] of the Federal Reserve is supporting technology more than anything else,” said Mobeen Tahir, director of macroeconomic research and tactical solutions at WisdomTree Europe.
“This year we clearly see a pivot to growth leading the way, and this is evident from the outperformance of the Nasdaq relative to the S&P 500,” he added.
The interest rate sensitive two-year Treasury yield increased 0.08 percentage point to 3.99%, while the 10-year Treasury yield increased 0.051 percentage point to 3.45%. Bond yields rise when prices fall.
In Europe, the regional Stoxx 600 equity benchmark rose 0.4%, helped by strong corporate earnings from Switzerland’s Richemont, which buoyed luxury goods makers. France’s CAC 40 gained 0.5%, led by strong gains from French reinsurer Scor.
The hikes come despite hawkish signals from European policymakers, with German central bank chief Joachim Nagel saying eurozone interest rates could still rise in September due to sticky underlying inflation measures.
Last week the ECB raised the deposit rate to 3.25%. Most economists expect it to stop at 3.75% in July.
London’s FTSE 100 gained 0.3% on Friday as official data showed economy up 0.1%. between the last quarter of 2022 and the first three months of this year, unchanged from the previous quarter and in line with analysts’ expectations.
The dollar gained 0.6% on Friday against a basket of six other currencies.
Shares fell in Asia, with Hong Kong’s Hang Seng index down 0.6% and China’s CSI 300 index down 1.3%. Japan’s Topix was the exception, gaining 0.6% and buoyed by positive earnings forecasts from some of the country’s largest companies in recent days.
—————————————————-
Source link