Stocks ended lower overall on Wall Street, leaving most investors main indices in red during the weekas more concerns arose about the inflation.
Markets fell after a report showed that US consumers are raising your inflation expectationsone more sign that the Federal Reserve will have to continue aggressively raising interest rates. This strategy increases the risk of recession.
The S&P 500 fell 2.4%, the dow jones 1.3% and the nasdaq dropped 3.1%. The yield on the 10-year Treasury note, which influences mortgage rates, topped 4% and is the highest since 2008.
A report showing that US consumers raised their expectations of future inflation hurt markets around the world, offering another sign that the Federal Reserve may have to continue to aggressively raise interest rates to moderate persistently high inflation. This strategy increases the risk of recession.
The operations have been unstable throughout the week and were especially volatile on Thursdayafter a government report showed that inflation is still very high. Major US indices staged their biggest rally in years on Thursday, reversing steep morning losses.
“I don’t think (the rally) means anything from a technical or fundamental point of view, because many things have not changedsaid Sylvia Jablonski, chief investment officer at Defiance ETFs. I don’t think we’ll see any sense of direction either stability short term”.
Investors have been looking for any sign that might allow the Fed to eventually loosen up their interest rate increases. Fed Chairman Jerome Powell has said that Americans’ expectations about future inflation play a big role when setting interest rates, because a runaway in them could create a much more dangerous and self-fulfilling spiral.
The central bank has already raised its benchmark interest rate five times this year, with the last three increases by three-quarters of a percentage point. Wall Street expects another rise in three quarter point percentage at your next meeting november.
The inflationalthough it is cooling in some sectors of the economy, remains very high overall. A University of Michigan survey showed on Friday that consumers raised their expectations for future inflation. It also showed that overall consumer confidence remains surprisingly strong despite high prices for a wide range of goods.
The bond yields rose after the Michigan report. The 10-year Treasury yield, which influences mortgage interest rates, rose to 4.01% from 3.86% shortly before the report was released. The 2-year Treasury yield, which tends to track expectations of future Fed action, rose to 4.50% from 4.40% just before the report was released.
Wall Street is also examining the latest earnings reports for more clues about how companies are coping with inflation.
Several big banks they were bright spots in the market. JPMorgan Chase rose 2.5% after reporting earnings and revenue that beat Wall Street forecasts. Wells Fargo rose 2.9% after posting solid earnings.
US crude prices fell 3.9%, weighing on energy stocks. Chevron fell 2.5%.
The markets europeans went up after British Prime Minister Liz Truss to abandon a planned cut of corporate tax, scrapping a key part of an economic plan that triggered weeks of market and political turmoil.
A government report showed that the pace of sales at US retailers was unchanged in September from August as rising rent and food prices squeezed money available for other things. The report was worse than economists anticipated.
(With information from AP)
Year-on-year inflation in the United States fell less than expected and a new rise in interest rates is expected
After starting lower on inflation data, Wall Street had the biggest rebound in years and closed with strong gains