Losses in the US stock market

Losses in the US stock market

Losses in the US stock market: The rise in Treasury bond yields and statements
from Federal Reserve Chairman Jerome Powell,
affirmed the need for more evidence of sustainable inflation before lowering interest rates, leading to a decline in US stocks.


Topics

US stocks incur losses

Gold stabilizes after two consecutive sessions of losses

Rise in the dollar against a basket of currencies

 

 

 

US stocks incur losses

US stocks suffer losses due to rising bond yields and Powell’s statements undermining March rate cuts.
Financial markets on Wall Street notably declined today due
to rising Treasury bond yields and statements from Federal Reserve Chairman Jerome Powell,
who affirmed the need for more evidence of sustainable inflation before lowering interest rates.
These statements affected company evaluations and led to declines in stock indices.
On the other hand, data from the Institute for Supply Management
showed positive growth in the US service sector in January, with an increase in input prices.
Despite labour market resilience, doubts remain about the timing of interest rate cuts.
With the rise in Treasury bond yields, traders expect an opportunity to cut interest rates in May and June.
The Dow Jones Industrial Average fell by 38,380 points,
while the S&P 500 index dropped to 4,942 points.
The Nasdaq index fell to 17,613 points.

 

Gold stabilizes after two consecutive sessions of losses

Gold stabilized near $2024 per ounce on Tuesday after two consecutive sessions of decline,
as strong US economic data and tightening bias” from the Federal Reserve weakened bets on interest rate cuts.
Data released on Monday showed that the US service sector’s
growth accelerated to its highest level in four months in January,
exceeding expectations at 53.4, surpassing the forecast of 52.
Previous data also showed that the US economy added 353,000 jobs in January,
significantly more than the 333,000 in December.
This greatly exceeds expectations, which were only about 180,000 jobs. Additionally,
Federal Reserve Chairman Jerome Powell affirmed in an interview
with CBS aired last Sunday that a rate cut in March is unlikely,
similar to comments made last week following the Open Market Committee’s decision.
He added that the central bank will likely move slower on interest rate cuts than the market expects.
Markets now expect a 15% chance of a Federal Reserve interest rate cut
in March and anticipate 115 basis points in total cuts this year,
down from about 150 basis points in early January.

 

Rise in the dollar against a basket of currencies


The dollar rose to its highest level in eight weeks against major currencies yesterday,
as traders’ expectations of significant interest rate cuts by the US Federal Reserve this year waned,
amid continued recovery in the US economy.
At the same time, the yen, Australian dollar,
and the New Zealand dollar fell to their lowest levels in two months during early Asian trading.
The euro fell to its lowest level in over a month against the US dollar.
The euro recorded a value of $1.0782 in the latest transactions.
On the other hand, the British pound fell by 0.18% against the US dollar,
reaching its lowest level since January 17th.

Regarding the US dollar index, it rose to 104.18 points against a basket of currencies,
its highest level since December.
It is worth mentioning that the decline in expectations
for interest rate cuts came as a result of a strong US jobs report released on Friday,
which significantly exceeded market expectations,
reinforcing statements by Fed Chair Jerome Powell at last week’s policy meeting
that an expected rate cut in March is unlikely.
Investors now expect less than a 20% chance that the Fed will start cutting interest rates in March,
compared to about 50% of expectations a week ago

 

Losses in the US stock market