Start of the session in the red on Wall Street

PARIS (Reuters) – The New York Stock Exchange fell slightly on Friday with a three-day weekend for the National Day, investors remaining worried about the impact on economic growth of the restrictive measures taken by central banks, determined to curb inflation.

In early trading, the Dow Jones index lost 5.45 points, or 0.02%, to 30,769.98 points and the Standard & Poor’s 500 fell 0.12% to 3,780.77 points.

The Nasdaq Composite fell 0.51%, or 55.82 points, to 10,972.916.

As a cycle of rising interest rates takes hold, investors have largely left equity markets since the start of the year, leading the S&P-500 index to complete its worst half since 1970.

Fed officials argued for a second rate hike of 75 basis points in July despite signs of slowing economic growth.

“Investor confidence is evaporating. The Fed is making it very clear that they are going to raise rates and if they want to control inflation, the economy is going to suffer in the short term and at least in the next six to twelve months,” said Kunal Sawhney of research firm Kalkine. “Volatility will be present in the second half of the year, as recessionary risks have intensified.”

With the second-quarter earnings season just weeks away, investors will be closely monitoring company forecasts to gauge the extent of inflation’s impact on earnings.

Micron fell 3.26% as the semiconductor maker presented a revenue forecast significantly below analysts’ expectations. In its wake, Texas Instruments, Nvidia, Qualcomm and Advanced Micro Devices lost 2.15% to 3.5%.

Many investors prefer to fall back on assets deemed safer than equities, starting with US Treasury bonds: the yield on ten-year Treasuries fell by nearly ten basis points to 2.8766%.

(Written by Laetitia Volga, with Amruta Khandekar, edited by)

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