Bond yields continue to rise
Impending shutdown weighs on US stock markets
September 26, 2023, 11:16 p.m
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The prospect of market interest rates remaining high is clouding the mood on Wall Street. There is also the looming possibility of a government shutdown in the USA. Things are going down, especially for tech stocks. But there is also a paper that triggers a real buying frenzy.
The prospect of persistently high interest rates hit the US stock markets on Tuesday. The Dow Jones Index the standard values closed 1.1 percent lower at 33,618 points. The technology-heavy one Nasdaq fell 1.6 percent to 13,063 points. The wide one composed S&P 500 lost 1.5 percent to 4273 points.
Investors continue to struggle with the prospects of the Federal Reserve’s continued restrictive monetary policy and its impact on the economy, according to stock market traders. “There’s so much uncertainty in the market,” said Chris Giamo, a financial expert at TD Bank. The price direction is largely determined by the interest rate issue. This was shown again on Bond market: the yield on US ten-year securities rose to up to 4.566 percent, a 16-year high. Investors speculate on higher interest rates for a longer period of time and therefore sell government securities – in return the yield increases.
Fed chief Jerome Powell recently signaled that the monetary authorities are considering an increase of a quarter of a percentage point this year. In addition, any interest rate cuts in 2024 are likely to be significantly smaller than previously announced. Consumer sentiment in the USA deteriorated surprisingly sharply in September given the recent rise in inflation.
Added to this is the fact that the financial year is about to end Worries about a possible government shutdown. If the Republican-controlled House of Representatives and the Democratic-led Senate fail to reach an agreement, this scenario could occur for the fourth time in a decade. What also made investors nervous was that the rating agency Moody’s sees another budget dispute as having a negative impact on the country’s credit rating.
Amazon is slipping
Stock marketers acted as a brake on the stock market also China’s economic downturn including an impending real estate crisis. The Chinese real estate company, which is groaning under billions in debt, came into focus again Evergrande. The shares slipped by eight percent after the subsidiary Hengda Real Estate failed to service a bond worth the equivalent of almost 520 million euros that was due the day before.
When it comes to individual values, the papers jumped Immunovant up 97 percent to $39.96 after the company reported early progress in studies of an antibody drug for use in autoimmune diseases.
Tech stocks, on the other hand, recorded discounts of up to 2.3 percent Apple, Meta Platformsthe Google parent alphabet and Microsoft. Shares of Amazon fell by a good four percent after a long-awaited antitrust lawsuit was filed by US authorities in the USA on Tuesday. The online retailer is accused of harming consumers through higher prices.