How are stock indices traded?
The Dow Jones Industrial Average DJIA, + 0.34% strengthened by 196 points or 0.6%, to 31,143. The S&P 500 SPX, + 0.03% traded up 15 points, or 0.4%, at 3,836. The Nasdaq Composite COMP, -0.08% gained 42 points, or 0.4%, at 11,223.
On Tuesday, the Dow fell 491.27 points or 1.6%. The S&P 500 fell 2% and the Nasdaq Composite fell 3%. All three recorded their worst daily percentage drop since June 16, according to Dow Jones market data.
What drives the markets?
Federal Reserve Chairman Jerome Powell said Wednesday at a European Central Bank forum that he sees a 2% rise in inflation while maintaining a strong labor market, but warned that “there is no guarantee we can do that.” .
Investors also heard comments from European Central Bank President Christine Lagarde, Bank of England Governor Andrew Bailey and Augustin Carstens, head of the Bank for International Settlements, to speak at the same conference.
According to US financial data, the GDP of the first quarter was revised to show a decline of 1.6%, compared to the previous decline of 1.5%.
The shares are limping towards the end of a miserable first half. The S&P 500 has fallen 19.6% so far in 2022, driven by concerns that decades-high inflation rates are seriously hurting the household climate and that the Federal Reserve’s response to rising prices could lead the economy into recession. .
Read: What follows for the stock market after the worst first half since 1970? Here is the story.
On Tuesday, the Conference Board Consumer Confidence Index fell to a 16-month low of 98.7 in June, with the outlook for the economy being the most cautious in nearly 10 years. The news helped turn early earnings for Wall Steet into heavy losses, with the Nasdaq Composite falling 3%, leaving the tech index losing 28% for the year to date.
“Last week, US stock markets rallied on the occult logic that a downturn in the US would mean lower Fed terminal interest rates and were therefore bullish on stocks. “Michigan climate,” said Jeffrey Halley. , senior market analyst at OANDA, in a note to customers.
See: Wall Street’s favorite stock market has a potential upward trend of 43% as we enter the second half of 2022
On Tuesday, “even weaker data on the consumer confidence of the US Congress Council provoked the opposite reaction, with US stocks falling sharply,” he added.
The Wall Street dive has left Asian and European stock markets faltering. Hong Kong Hang Seng HSI -1.88% down 2% and Nikkei 225 NIK -0.91% down Japan 0.9%. China’s Shanghai Composite SHCOMP lost -1.40% to 1.4% after President Xi Jinping reiterated that the regime’s strict COVID-19 policy was “correct and effective”.
The comments fueled concerns that supply constraints in China could exacerbate global inflationary pressures. And similar concerns emerged in Spain on Wednesday, where data showed prices rose 10.2% in June, their fastest pace in 37 years. European Stoxx 600 SXXP, -0.63% fell 0.8%.
Oil prices rose higher, with WTI CL.1 crude oil up + 1.68%, up 1.5% to $ 113.41 a barrel.
The yield on the US 10-year bond TMUBMUSD10Y, 3.137% decreased by 1.3 basis points to 3.167%.
Companies in focus
Shares of Pinterest Inc. PINS, -1.27% rose 0.2% after social media company announced that co-founder Ben Silbermann is resigning as CEO and being replaced by an e-commerce executive from Google. Shares of BBBY, -21.67%, fell 18.7% after the announcement of the disappointing first quarter financial results and the dismissal of its CEO, Mark Tritton. Shares of General Mills Inc. GIS, + 5.47% recorded an increase of 4.7% after exceeding the quarterly expectations. The company posted a net profit of $ 822.8 million for the fourth quarter, or $ 1.35 per share, nearly double the $ 416.8 million, or 68 cents per share, last year. Custom EPS $ 1.12, before FactSet consent for $ 1.01 per share.
Other assets
The ICE US Dollar Index DXY, + 0.33% fell 0.01%. Bitcoin BTCUSD, -0.72% fell 4.6% to trade close to $ 20,120. Gold GGQ22 futures for -0.19% gained $ 6.30, or 0.4%, to $ 1,827.90 an ounce.
