The American market is falling. What happened?
on Monday, the S&P 500 index fell 3.9%, reaching the lowest level since March 2021. The fall from annual maximums amounted to 21.8%. Following the American market, key European sites began to decline. We tell you what happened. Wall Street Journal has published a message that on the near future the Fed will consider the possibility of increasing the rate by 75 BPs at once, which is half a compound exceeds the expectations of analysts. After publication in the last 30 minutes of the session, the average indicators reached minimums.
Standard index S&P 500 closed on the territory of the bear market. This happened for the first time since March 2020, when the Pandemia of Coronavirus has just begun, CNBC writes. All S&P 500 shares have decreased during a trade day. In addition, against the backdrop of a general decline, prices for treasury bonds fell, as a result, the yield of 10-year bonds reached the greatest importance since March 2020. Investors continue to comprehend a more sharp one than expected, the inflation report, which was presented on Friday, as well as A possible increase in the rate from the Fed.
“Anyone who wants to be a bull cannot find what to hang up their hat for,” said one of the founders of Cresset Capital. According to him, interest rates are growing, so it is not clear in which direction the economy will develop.
that with shares
amid concern about recession, Boeing shares of 8.7%, Salesforce by 6.9%and American Express by 5.2%, pulling the down Jones Industrial Average. Technological promotions were also injured: Tesla, Netflix and Nvidia collapsed by 7%. The fall is also noted in the tourist sector. Carnival Corporation And the Norwegian Cruise Line fell by 10% and 12%, respectively, Delta Air Lines – minus 8%, united – minus 10%.
earlier the US statistics and labor bureau reported that last month the consumer price index in the United States grew by 8.6% compared to last year – this is the fastest increase in the indicator since December 1981. Also at the weekend, the price of Gallene gasoline exceeded $ 5 , which further increased fears about the growth of inflation.
What does it mean
shares to the growth in bets, as well as high prices for energy and fuel. Fears about High inflation is broadcast into the risks of more aggressive tightening of the DCP from the Fed and the continuation of the growth of dollar interest rates. The topic of inflation in the USA came to the fore in all business media, which only increases the nervousness of market investors on this occasion. Partially rectify the situation with the consumer price and prices of manufacturers could a drop in oil quotations due to a reduction in demand in the conditions of a recession, but this is not the next days.
markets ignored the inflationary problem. However, it was already noticeable for a long time that not just one -time elements of the consumer price index, but its stable components began to grow. Last Friday statistics simply became a trigger, which is enhanced by the effect of the reduction in the balance of the Fed.
In such a situation, expectations are growing that the American regulator at a meeting in this Wednesday will go to the fastest one -time increase in the key rate from 1984, raising it at once by 75 B.P. (up to 150-175 b.p.). Some of the largest US investment. And according to the CME FedWatch Tool indicator, the probability of this is 95% against 3% in early June.
