The new liquidations are shaking it up Wall Street in the current session, with the Dow Jones falling nearly 500 points amid concerns about the path of the US economy.
THE Dow fell 494.82 points or 1.21% ending at 40,347.97 points. At the bottom of the session, it lost 744.22 points or 1.8%.
THE S&P 500 fell 1.37% to end at 5,446.68 points, while Nasdaq decreased by 2.3% to 17,194.15 units. As a result, the Russell 2000 index of small stocks fell 3%. Also, the VIX index, which tracks volatility, jumped to its highest level since April.
Some new data have fueled concerns about a possible recession, as well as the view that the Federal Reserve may take too long to start cutting interest rates. Data on jobless claims showed the largest increase since August 2023, while the manufacturing index, a barometer of US industrial activity, stood at 46.8 in a sign of a severe economic slowdown. After the data, the 10-year US yield fell below 4% for the first time since February.
The data came a day after the Fed opted to keep interest rates steady at their highest level in two decades, even as Chairman Jerome Powell opened the door to a rate cut soon, possibly at its September meeting. .
Analysts say today’s data points to an economic slowdown amid severe volatility. “The market doesn’t know whether to laugh or cry because with three rate cuts on the horizon and 10-year US Treasury yields falling below 4%, the winds of recession are starting to pick up,” said Chris Rapkey, chief economist. of FWDBONDS.
Stocks that could suffer in such a scenario are those that experienced the biggest losses in the current session, including JPMorgan Chase, which recorded losses of 2.3% and Boeing, which fell more than 6%.
However, stocks opened the session higher as Meta Platforms rallied 4.8% on better-than-expected second-quarter results.
Even tech majors like Nvidia felt the pain with the leading artificial intelligence chip company posting losses of 6.7%.
Still, the S&P 500 is up 14% this year, with July marking the eighth month of gains in the last nine.