Dow Jones recovery ended
Rising oil prices fuel fears of inflation
06/08/2022, 11:00 p.m
Investors are awaiting clear directional signals that inflation is slowing down. But rising energy prices continue to worry them. Trading apps like Robinhood fear for their business model because the US Securities and Exchange Commission wants to tighten the rules for stock trading.
Resurgent inflation worries put an end to Wall Street’s recent recovery. The increase in government bond yields above the psychologically important three percent mark and the rise in oil prices were one of the triggers. The US Standard Value Index Dow Jones fell 0.86 percent to 32,895 points. The broad one S&P 500 falls 1.1 percent to 4115.77 points and the tech-heavy Nasdaq down 0.73 percent to 12,086.27. The seesaw market is likely to continue for a while, said Rick Meckler, a partner at wealth manager Cherry Lane. “There’s no breaking news, either on corporate balance sheets or the economy. People are waiting for signs that inflation is slowing down a bit. They’re concerned about energy price developments.”
The price of the US crude oil grade STI increased by 2.7 percent at times, despite increased inventories, and at $122.66 a barrel (159 liters) was as high as it was three months ago. The end of the lockdowns in China is fueling speculation that demand will increase, said UBS analyst Giovanni Staunovo. There is also a threat of a strike by Norwegian oil workers.
At the companies advanced Robinhood into the limelight. The US Securities and Exchange Commission wants to tighten the rules for stock trading. This means that the trading app, which is popular with young small investors, is threatening to lose its main source of income: discounts and remuneration from large trading houses for forwarding orders. Robinhood titles are down 3.9 percent after slipping about 4 percent on Tuesday. The brokerage house Charles Schwab, whose income also largely consists of these so-called PFOF (“Payment-for-Order-Flow”), lost 2.6 percent. The papers of also came under pressure State Street, which became cheaper by 5.5 percent. According to a media report, the financial investor is considering taking over Credit Suisse.
China loosens regulation of tech stocks
Among Wall Street’s favorites were US stocks of Chinese firms like the online retailer Alibaba and pinduoduo or the search engine operator baidu. They gained up to 14 percent thanks to indications of a relaxation of strict regulation by the Beijing government. In the papers of roku investors also jumped at it. They also rose by nine percent. Netflix has rumored to be eyeing the streaming device provider and online advertising platform operator. Since the online video store is apparently planning cheaper, advertising-financed subscriptions, the company could buy away a potential competitor, said analyst Susannah Streeter from brokerage house Hargreaves Landsdown.