American stock exchanges opened, Tuesday, for the first time this week, after Americans celebrated the American Declaration of Independence on Monday, July 4th.
All major indexes on the New York Stock Exchange have fallen significantly since the opening, but during the trading day, the mood on the tech-heavy Nasdaq has changed. When trading ended on Tuesday, it looked like this with the three leading indicators:
- The broad S&P 500 index rose 0.16 percent.
- The Dow Jones Industrial Average fell 0.42 percent.
- The Nasdaq Technology Index rose 1.75 percent.
From the fear of inflation and interest rates, it is now the impending fear of recession that characterizes the development of the market.
An economic index, which measures eurozone investors’ faith in economic development, has fallen to its lowest level since May 2020, CNBC news website writes. The lower measure indicates that investors now believe a recession is “inevitable”.
A recession means a severe economic contraction, which is often measured as the economy contracting two consecutive quarters.
Ten year old demon
CNBC may also indicate that the yield curve in the US upside down sometime tuesday.
This means that the interest rate on government bonds with a ten-year maturity, also called ten-year term, drops below the interest rate on short-term government bonds. This phenomenon is often interpreted as a warning of an impending recession.
The ten-year-old is often referred to as the world’s hottest interest rate because it is a reference to interest rates and financial figures around the world. When interest rates fall, at the same time as the central bank announces a sharp rise in interest rates, it indicates a decline in faith in economic developments in the future.
The ten-year-old fell more on Tuesday, and is now at 2.84 percent. Since mid-June, the 10-year-old is down 3.48 percent.
On the other hand, lower interest rates may have lifted the Nasdaq, which features a large proportion of growing companies, according to CNBC. Several heavyweights contributed to the index’s rise on Tuesday. Among others, Tesla, Netflix and Apple shares rose 2.55 percent, 3.3 percent and 1.89 percent, respectively, on Tuesday.
Shares of Ford Motor Co. fell about 2 percent during the trading day after the company announced that the increase in sales did not come as quickly as expected. When the trading day ended, Ford’s stock was down 0.97 percent. (Conditions)Copyright Dagens Næringsliv AS and/or our suppliers. We would like you to share our cases using a link that leads directly to our pages. All or part of the Content may not be copied or otherwise used with written permission or as permitted by law. For additional terms look here.
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