The Wall Street stock market first fell and then rebounded after the long holiday. The Dow Jones index fell more than 500 points in the morning and then buying emerged, and the closing narrowed to about 150 points. The S&P 500 index and the Nasdaq index reversed. The market is worried about a recession in the United States. The 2-year and 5-year interest rates were inverted for a time, and the overall bond market also rose sharply. The 10-year US Treasury bond yield fell to 2.8%.
The dollar rose significantly, rising 1.5% against the European Union to 0.97, and the dollar index rose to a high of about 20 years. Commodity prices fell sharply, with New York oil futures falling below the $100 level for the first time in nearly two months; gold falling below the $1,800 mark; London copper futures closed down more than 4% to a 17-month low.
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July 5 (Tuesday) Market Conditions
l The Dow Jones Industrial Average fell 155.81 points, or 1.05%, to 30,967.82.
l The S&P 500 rose 6.06 points, or 0.16 percent, to 3,831.39.
l The Nasdaq rose 194.39 points, or 1.75 percent, to 11,322.24.
l New York August oil futures closed at $99.50 a barrel, down $8.93 or 8.24%, the biggest one-day drop since March.
l New York August gold futures closed at $1,763.9 an ounce, down $37.6, or 2.1%.
l U.S. 10-year Treasury bond yields closed at 2.809 percent, down 8.0 basis points.
Tech stocks, which were supported by falling debt and interest rates, drove the market recovery alone. Meta, the parent company of Facebook, rose by half, and Alphabet, the parent company of Google, rose 4.4%. Recently, chip stocks under pressure also rebounded, and Micron rose by half. Consumer stocks stabilized, with Nike up 3 percent and Target up 2.3 percent.
Energy stocks were in the red, with ConocoPhillips down nearly 7 percent and Marathon and Hess down more than 6 percent. Defensive stocks such as Lockheed Martin, Raytheon and Northrop fell 4%. Utilities were broadly down.
Credit Suisse strategist Jonathan Golub said in a research note that a U.S. recession could be avoided, but he still cut his year-end target for the S&P 500 to 4,300 from 4,900. “The most accurate indicator of a recession is a collapse in jobs, while consumers and businesses are unable to service their debts. While our economic growth (from super high levels) is now a real slowdown, neither of those two indicators have yet.”
On the other hand, U.S. stock market fans are showing signs of softening their hands. The Wall Street Journal quoted data from S3 Partners, a technology and analysis company, showing that the total amount of short selling in the United States increased by $20 billion in June, which was lower than the increase of $61 billion in May. Lower than most months in 2022. Opinions believe that this may mean that the stock market is nearing its lows and is ready to rebound.