Dow Jones with a whopping minus
Interest rate fears plague Wall Street
October 3, 2023, 11:58 p.m
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Renewed interest rate and economic concerns are pushing Wall Street into the red. The prospect of persistently high interest rates from the Fed is also affecting the energy sector. A new deal with United Airlines, on the other hand, is boosting Boeing’s share price.
Interest rate and economic concerns have made investors on Wall Street nervous. The Dow Jones Index the standard values closed 1.3 percent lower at 33,002 points. The technology-heavy one Nasdaq fell 1.9 percent to 13,059 points. The broad one S&P 500 lost 1.4 percent to 4229 points.
Several monetary watchdogs from the US Federal Reserve bank dashed investors’ hopes of early interest rate cuts with their statements on Monday evening. Meanwhile, the results of a U.S. Department of Labor job vacancy survey in August were also surprisingly high. The Fed is trying to cool down the hot labor market by raising interest rates.
The exceptionally high oil prices, bond yields and the dollar exchange rate also made investors nervous. “These three factors – expensive oil, high yields and a strong greenback – are essentially deflating financial markets,” said Samy Chaar, chief economist at Swiss banking group Lombard Odier in Geneva.
The prospect of persistently high interest rates supported the US currency. The Dollar index gained 0.1 percent to 107,030 points. At the same time, the strong greenback hit the yen, which was just below the 150 mark at 148.82 to the dollar. “Investors seem to be assuming that the Japanese authorities will intervene if the price rises further,” commented Rob Carnell of bank ING. The yield on ten-year US bonds remained at a 16-year high of 4.798 percent.
The prospect of continued high interest rates from the Fed hurt the energy sector. According to analysts, investment-intensive projects in the field of renewable energies are particularly affected. “Many existing contracts in the offshore wind industry have been negotiated under the assumption of permanently low interest rates and cheap industrial metals,” said Peter Garnry, a manager at Danish online broker Saxo.
Airbnb with losses
For example, the shares of the Danish wind farm operator active in the USA fell Orsted by a good six percent. Also the rivals Vestas, Nordex and General Electric lost up to around six percent. They also flew out of the depots Amazon and Microsoft, each of which lost around three percent. Reuters had reported that the British media regulator Ofcom wants to launch an antitrust investigation into the dominance of the two companies in the British cloud computing market. Lost for other individual values Airbnb after a downgrade 6.5 percent. The experts at the regional bank KeyBank have set the stocks to “Sector Weight” after previously “Overweight”.
The food manufacturer’s stocks also came under pressure McCormick, which lost a good eight percent. The company missed analysts’ estimates for third-quarter sales due to weak demand. The PC manufacturer’s papers HP On the other hand, they gained 1.8 percent following a buy recommendation from the analysis firm BofA Global Research. Were also in demand Boeing, which increased by 0.6 percent. United Airlines announced an order for 50 Boeing 787 Dreamliner aircraft.