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Investors worry about interest rates and the economy

NEW YORK (dpa-AFX) – The US stock market will probably continue its steep slide from the end of the week seamlessly on Monday. Technology stocks in particular are likely to be under strong selling pressure. The broker IG valued the leading index Dow Jones Industrial a good three quarters of an hour before the start of trading with minus 1.7 percent to 30,862 points. The technology-heavy Nasdaq 100 was recently appraised around 2.7 percent weaker.

As in Asia and Europe, increasing interest rate and recession concerns are likely to scare US investors as well. Market participants fear that the unexpectedly high inflation could prompt the US Federal Reserve (Fed) to take even more significant interest rate hikes. So far, it was widely expected that interest rates would rise another 0.50 percentage point on Wednesday. The latest price data has now increased the likelihood of the Fed raising rates by 0.75 points, said Capital Economics economist Michael Pearce.

“Market participants remain very nervous because, in addition to the inflation dynamic, there are also signs of a decline in consumption. That would hit the economy twice and lead to economic downturns,” explained Andreas Lipkow from the Comdirect. In addition, the resurgent Covid issue in China is currently getting on nerves of investors. There are currently simply too many sources of risk and little prospect of relief.

Among the individual values, Tesla shares are once again the focus of news. The US electric car maker has announced a three-for-one stock split to make its shares cheaper for small investors. Stock splits don’t actually change a company’s stock market value, but the price per share falls as a result, so that the share appears cheaper from a purely visual point of view. In addition, the Canadian bank RBC upgraded Tesla from “Sector Perform” to “Outperform”. Neither news helped Tesla shares, however, as they fell more than 4 percent premarket.

The general weakness of the technology stocks did not stop at other big names on Monday before the market. Apple’s shares fell by 2.8 percent, Amazon by 4.3 percent and Microsoft by 2.3 percent. Oracle’s titles lost 2.1 percent in premarket business. The database company will present its quarterly figures on Monday after the close of trading./edh/jha/

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