Investors threw shares on Tuesday and gambled on a less aggressive Federal Reserve policy, after comments from social media group Snap and disappointing economic data raised fears that U.S. growth is expected to slow dramatically.
The Nasdaq Composite, which is weighted by major U.S. technology companies, fell 2.3 percent on Tuesday. The more balanced S&P 500, which tracks the capital of major listed companies, fell 0.8 percent. Which fell at the beginning of the session.
U.S. stocks were hit hard this year, with the average share of Brussels 3,000 falling more than 40 percent from recent highs as the Fed raised interest rates in an attempt to reduce inflation. In the US following the corona epidemic could dissipate.
Finance executives instead collected U.S. government debt as they swapped riskier investments for safe havens. One in price since the end of April.
Investors’ nerves tapped after Snap said Late Monday that “the macroeconomic environment has deteriorated faster and faster than expected” since it issued guidelines in April. The group said its sales and earnings for the current quarter will be below its previous expectations. Snap shares fell 43 percent on Tuesday.
Specifically, Snap cited the challenges posed by higher inflation, rising interest rates, declining supply chains and the war in Ukraine among others. Snap’s advertising had a particularly noticeable impact on its stock price and the market more broadly because its advertising was unplanned.
“Undoubtedly, the stern warning about ‘macro deterioration’ from an overnight social media company, just a month after the publication of quarterly guidelines, pushes all the relevant ‘leading indicator’ buttons,” wrote City strategist Edward Acton.
The Snap sale led Google’s parent alphabet down 5% on Tuesday, while Facebook owner Meta fell 8%. NASDAQ is now down 28% this year.
The popular updates came after American consumer consumers Target and Walmart Produced A similar gloomy forecast last week.
Weak economic data on Tuesday also contributed to the dismal outlook. The U.S. Census Bureau reported that sales of new homes fell by nearly 17% in April, even as the supply of new homes for sale rose. The data “clearly indicates a housing market that has turned upside down,” said Doug Duncan, chief economist at Fannie Mae.
And data from the S&P Purchasing Managers’ Index showed that business activity in the US and the UK slowed in May.
Traders have also speculated that these economic winds may cause the Fed to be less aggressive in raising its interest rates than expected earlier this year. The two-year yield, which fluctuated with interest rate expectations, fell by 0.14 percentage points to 2.49%.
“The Fed wants to slow down the economy. The economy is slowing down,” said Andrew Brenner, head of international fixed income at NatAlliance Securities. “The Fed may spend something without raising interest rates as they might expect.”
European and Asian data provided an additional basis for investor concerns.
German businesses “have raised their charges for goods and services to offset the higher costs of energy, fuel, raw materials and manpower,” according to a report accompanying the S&P Global Purchasing Managers’ Index in May for the dominant eurozone economy.
Japanese manufacturing activity is also expanding there The slowest pace in three monthsAccording to a parallel PMI poll of the Asian nation, whose compilers have blamed “supply chain disruptions” from “economic sanctions imposed on Russia” and closing measures across China.
Europe’s regional stock index Stoxx 600, which has lost more than a tenth so far this year, fell 1.1%. Hong Kong’s Hang Seng Index closed down 1.8% and Tokyo’s Nike lost 0.9%.
US stocks fall on fears of slowing growth Source link US stocks fall on fears of slowing growth