U.S. stocks plummeted and Treasury bonds rose on Thursday as investors sought to navigate a complicated forecast for global stocks damaged by inflation and signs of a slowdown in growth.
The S&P 500 was down 0.6%, closing at the worst level since March 2021, while the high-tech Nasdaq Composite was down 0.3%. Both indices were under heavy selling pressure in the previous session, with the S&P shed 4% in the worst off-sale since June 2020 and the Nasdaq plunged 4.7%.
Earlier today, the two stock indices rose into positive territory. The fluctuations on Thursday reflect the deep uncertainty among investors about the growth and inflation forecast as central banks, led by the US Federal Reserve, dismantle the stimulus measures that have helped bolster the global economy over the past two years.
Disappointing earnings reports in recent days from major U.S. companies, including retailers Walmart and Target and the Cisco network group, have shown how corporate America is struggling with headwinds, including rising input costs, Ukraine’s war and cooling China’s growth.
However, many Wall Street investors and banks still expect the U.S. economy to evade a continuing decline in economic output.
U.S. government long-term bonds rose in price on Thursday, reflecting the jolt of growth. Rising prices pushed the 10-year Treasury bond yield down 0.03 percentage points to 2.85%, from last week’s high of 3.2%. Yields on bonds with shorter dates have declined, reflecting betting on a more moderate rise in interest rates. The two-year yield felt for the policy fell by 0.05 percentage points to 2.62%.
Read more about today’s market moves Here.
Another report by Primrose Riordan in Hong Kong and Naomi Rubnik in London
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