Live Stock News: Stocks Stirred as Recession Warnings Mount, Uber and Lyft React to Temporary Worker Proposal, Amazon Prime Day

Symbol Price Change %Change
me: DJI $29,202.88 -93.91 -0.32
SP500 $3,612.39 -27.27 -0.75
Me:COMP $10,542.10 -,110.30 -1.04

US stocks rocked early Tuesday tomorrow as investors express concern about the Federal Reserve’s rate tightening and borrowing difficulty.

Stocks fell on Monday, continuing a stretch of volatility as concerns about a Federal Reserve tightening, the escalation of the Ukraine war and China’s trade policy rattled markets.

The S&P 500 fell after opening slightly higher, shedding 27.27 points, or 0.7%, to close at 3612.39. The Dow Jones Industrial Average fell 93.91 points, or 0.3%, to 29,202.88, while the Nasdaq Composite fell 110.30 points, or 1%, to 10,542.10. That’s the lowest closing value for the tech-heavy Nasdaq since July 2020, according to Dow Jones Market Data.

Chipmaker stocks suffered losses stemming from new restrictions imposed by the Biden administration on semiconductor exports, aimed at hampering China’s military.

The PHLX semiconductor sector fell 3.5% on Monday to its lowest closing level since November 2020. Those losses also helped drag down shares of companies that are major users of chips.

“The new restrictions placed on the sale of semiconductors to China are a big reason why we’re seeing the downward trend in those stocks,” said Randy Frederick, managing director of trading and derivatives at Schwab’s Center for Financial Research.

Technology stocks make up about a quarter of the S&P 500, Mr. Frederick noted. Chipmaker Qualcomm sank $6.31, or 5.2%, to $114.60 on Monday, while Broadcom fell $22.78, or 5%, to $437.70. Technology was the worst performer among the 11 S&P 500 sectors, down 1.6%.

Changing expectations of more interest rate hikes by the Federal Reserve have been the main driver of the recent stock market swings.

Friday’s jobs report showed the labor market is still tight as the jobless rate fell back to a half-century low, exacerbating concerns the Fed could tighten financial conditions more aggressively.

Hopes of a “Fed pivot,” in which the central bank would pause interest rate hikes and send equities higher, have largely faded.

Traders now expect the benchmark fed funds rate to hit 4.7% by the second quarter of 2023, according to FactSet derivatives data, more aggressive than the Fed’s own forecasts.

“Inflation is still high and the labor market is red hot; there is nothing to suggest that the Fed will be dovish or pivot for at least several months,” said Michael Antonelli, market strategist at Baird. Investors await the upcoming release of US inflation data on Thursday as another important indicator of where monetary policy could be heading.

“There’s still that hangover in the markets. The US labor market is still incredibly strong and the Fed has only one mandate at the moment: inflation,” said Fahad Kamal, chief investment officer at Kleinwort Hambros. “The most important number in the world right now” is the next number for inflation, he said.

Meanwhile, Asian stocks were mostly lower on Tuesday as losses in tech-related stocks weighed on global benchmarks.

Taiwan fell 4.4% after reopening for a holiday in the first trading session since the US imposed new limits on exports of semiconductors and chip-making equipment to China. TMSC, the world’s largest chipmaker, plunged 8.3%.

Japan’s Nikkei 225 fell 2.6% to 26,401.25. South Korea’s Kospi lost 1.8% to 2,192.07. Both markets were also reopening after the holidays on Monday. Hong Kong’s Hang Seng fell 2.2% to 16,830.73. The Shanghai Composite gained 0.2% to 2,979.79, while Australia’s S&P/ASX 200 lost 0.3% to 6,645.00.

“Japanese and South Korean markets are catching up with earlier global market losses, and their exposure to the tech sector is driving further sell-off as reflected on Wall Street,” Yeap Jun Rong, market strategist at IG in Singapore. he said in a report.

In encouraging news, Japan reopened to tourism generally without restrictions on Tuesday after more than two years of COVID-19 restrictions. The pent-up travel spending could help boost the world’s third-largest economy as it grapples with slowing global growth and inflation.

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