Investors fear recession: Dow falls below 30,000 mark

Investors in recession fears
Dow falls below 30,000 mark

The price gains from the previous day after the interest rate hike in the USA are already wasteland just one day later. Other central banks are following the Fed’s example and are tightening their monetary policy, which once again makes investors aware of the risks of global inflation. For the first time since the beginning of 2021, the Dow has fallen below the 30,000 mark again, with the technology-heavy Nasdaq being hit the hardest.

Investors’ initially positive reaction to the sharpest US interest rate hike since 1994 is giving way to disillusionment. The US Standard Value Index Dow Jones closed 2.4 percent lower at 29,927 points – breaking the 30,000 point mark for the first time since the beginning of 2021. The tech-heavy one Nasdaq fell 4.1 percent to 10,646 points. The broad one S&P 500.SPX lost 3.3 percent to 3666 points.

Nasdaq 100 11,127.57

US Treasury bonds also flew out of the portfolios, causing the yield on the ten-year T-bonds approached its recent eleven-year high at 3.625 percent. “The Fed rally is fading as investors question the Fed’s ability to achieve a soft landing for the economy,” said Peter Cardillo, chief economist at investment firm Spartan. Therefore, the stock market has not bottomed out yet. Geir Lode, head of stocks at asset manager Federated Hermes, was also pessimistic about the future prospects. “We see it as increasingly likely that it will take a recession and higher unemployment to bring inflation under control.” US President Joe Biden, on the other hand, told the AP news agency that a recession is not inevitable. In addition, no country in the world is as well positioned as the USA to be able to overcome inflation.

Against this background, investors parted with technology stocks in particular. So the shares of Amazon, Apple, Netflixthe Facebook operator Meta and the Google parent alphabet by up to 3.9 percent. Higher interest rates will devalue future profits from these high-growth firms.

PayPal
PayPal 67.81

Credit card investors and payment processors also had to give up due to the growing fears of a recession. The titles of American Express, Mastercard, PayPal and Visas fell by up to six percent. papers of the major banks Bank of America, Citigroup and JPMorgan therefore gave in each case about 1.7 percent.

Retailers were hit by the prospect of consumers losing their buying spirit. The shares of the department store chain Macy’sthe hardware store operator HomeDepot and the fashion company gap slipped by up to 9.6 percent. For similar reasons, investors in chip makers such as AMD, Intel or Nvidia from whose papers lost up to 8.1 percent. The Philadelphia Semiconductor Index temporarily fell 6.2 percent.

Cryptocurrencies still under pressure

The sell-off mood also gripped cryptocurrencies again. Bitcoin and Ethereum became cheaper by around four to 20,742 or by 8.4 percent to 1081 dollars. The tilt of Celsius, a provider of cryptocurrency lending, continues to give investors headaches, said analyst Timo Emden of Emden Research. They feared that other companies in the industry would be dragged along.

Against this background, values ​​from the cryptocurrency sector and companies dealing with the blockchain technology underlying Bitcoin & Co flew out of the depots. So the papers fell off Coinbase, Riot, Marathon and Silvergate by up to 8.5 percent. The titles of the electric car manufacturer Tesla and the software company MicroStrategywhich have invested billions in Bitcoin, fell 8.5 and 5.8 percent, respectively.

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