The Dow New York Stock Exchange ended lower on Tuesday (July 5) as investors worried about a recession in the United States. However, the S&P500 and Nasdaq closed in positive territory, helped by late stock orders. market This includes technology stocks.
The Dow Jones Industrial Average closed at 30,967.82, down 129.44, or -0.42%, the S&P500 closed at 3,831.39, up 6.06, or +0.16%, and the Nasdaq closed at 11,322.24, up 194.39, or +1.75%.
The trading environment on the New York Stock Exchange has been pressured by concerns about a recession in the United States. After the Federal Reserve Bank of Atlanta released its latest GDPNow forecast model, which shows The US economy contracted 2.1% in the second quarter, from an earlier indication of a 1.0% contraction.
GDPNow forecasts show that the US economy contracted in the second quarter more severely than the 1.6% contraction in the first quarter, indicating that the US economy has entered a recession. As the economy contracts for two straight quarters, the Atlanta Fed will report new GDPNow forecasts on July 7.
Energy stocks fell sharply. After the price of WTI oil fell more than 8%, falling from the level of $100/barrel. Exxon Mobil was down 3.13 percent, Halliburton was down 8.08 percent, ConocoPhillips was down 6.93 percent and Chevron was down 2.63 percent.
Stocks dependent on economic growth fell. This includes industrial and material stocks. Freeport-McMorran fell 6.55 percent, US Steel Corp was down 4.97 percent, Boeing was down 1.59 percent, General Electric (GE) was down. 2.35% Honeywell shares were down 1.72 percent, and Caterpillar was down 2.41%.
Mohammad El-Erian, an analyst at Allianz, said: The US bond market posted an inverted yield curve overnight, with yields on two-year US Treasury bonds rising above their 10-year yields, possibly a sign that the US bond yields are moving higher. Investors expected the economic contraction to push the Fed to slow interest rate hikes.
The forecast boosted technology and communications stocks, with Meta Platforms up 5.1 per cent, Twitter up 0.39 per cent, Apple up 1.89 per cent and Netflix up. 3.3% Alphabet shares were up 4.16%, Microsoft shares were up 0.16%, Amazon was up 3.6%.
The surge in tech stocks helped support the Ark Innovation ETF, jumping more than 9%. The Ark Innovation ETF is a fund managed by Katie Wood and focused on investing in technology stocks.
Investors are eyeing the release of the minutes of the Fed’s daily meeting June 14-15 today, US time. Including the number of non-farm payrolls on Friday.
Analysts predict that The number of non-farm payrolls will increase by just 250,000 in June. Below 390,000 positions in May The unemployment rate in June is expected to stabilize at 3.6%.
In addition, investors are also keeping an eye on the trade situation between the US and China. After the media reported that President Joe Biden may announce the abolition of tariffs on some Chinese imports this week. which, if applicable It is also an important step in relieving trade tensions between the US and China. After a few weeks Biden has held several meetings with the Economic Advisory Council. to discuss alternatives to the decision to lift tariffs on Chinese imports initiated by former President Donald Trump.
