US Stocks Gyrate, While Dollar Gains On Geopolitical And Economic Concerns

On Tuesday, a choppy trading session saw US stocks mixed, while a risk-off session resulted in a US dollar rally driven by simmering tensions between Beijing and Washington and economic uncertainties.

Mixed results

The S&P 500 and the Dow indexes were both tradings in the red, but the Nasdaq was able to record gains, as the broader market underperformed due to economically sensitive sectors.

Meanwhile, the US dollar managed to outperform nearly all of the asset classes for the day. Market analysts said that investors were flying to safety.

Chinese warplanes were buzzing the Taiwan Strait after the arrival of Nancy Pelosi in Taipei, despite the warnings from China.

However, analysts noted that investors were less worried about geopolitics and were more focused on economics.

They said that the market movements were a push-and-pull about what is happening in the economy. The matter is now whether the US Fed will stop rate hikes as the economy declines, or continue in order to control inflation.

Indexes fall

The Labor Department presented a report showing that there was a 5.4% drop in job openings in June, which indicates that softening demand is resulting in weakness.

If demand for workers softens, it could help cool wage inflation. Analysts are predicting that the employment report on Friday would see hourly earnings fall by 0.2%.

As far as indexes are concerned, there was a 0.73% decline in the Dow Jones Industrial Average, which lost 239.29 points to come down to 32,559.11.

A 0.15% decline in the S&P 500 brought it down by 6.12 points to reach 4,112.51 points. As for the Nasdaq Composite, it rose by 0.29%, or 35.93 points to reach 12,404.90.

European stocks also closed lower because of rising Sino-US tensions and weak economic data. There was a 0.32% fall in the continent-wide STOXX 600 index and a 0.52% decline in MSCI’s world stocks index.

Other markets

There was a 1.16% decline in emerging markets stocks and a fall of 1.19% in the MSCI’s index of Asia-Pacific shares, excluding Japan.

The Nikkei index in Japan, it suffered losses of 1.42%. Volatile trading also pushed up US Treasury yields, as the possibility of attractive returns and growth overcome geopolitical concerns about Taiwan.

There was a rise in crude prices just ahead of the OPEC+ meeting next week, which will see oil producers come together.

The outcome of the meeting could see the global oil supply get a boost, while those gains may be capped because of fears of an economic recession.

There was a 0.56% rise in US crude, which reached $94.42 a barrel, while a 0.5% rise was seen in Brent that pushing it to $100.54.

The dollar had been declining recently against a basket of major currencies, but the greenback managed to reverse, while the Japanese yen also continued its gains against the dollar.

There was a 0.66% rise in the US dollar index, while the euro declined 0.73% to reach $1.0186. Sterling saw 0.51% losses that brought it down to $1.2185.

Leave a Comment