Shares on Wall Street rose in choppy trade on Tuesday as investors awaited a flurry of U.S. earnings reports that will be scrutinized for signs of strain from high inflation and rising interest rates .
The broad S&P 500 index was up 0.4% by mid-afternoon in New York, while the tech-heavy Nasdaq Composite gained 0.1%.
These moves in U.S. stocks followed four consecutive sessions of declines and marked a reversal of falls earlier on Tuesday when the S&P 500 hit its lowest intraday level since November 2020.
Stocks have been under pressure in recent days after a US labor market report last week pointed to continued robust job growth in the world’s largest economy, and ahead of a widely reported inflation report. expected, expected Thursday.
Data on jobs and price growth have been closely watched this year for clues about how aggressively the Federal Reserve and its peers will tighten monetary policy. Evidence of a still-warm economy fueled concerns the US central bank will raise interest rate in a recession.
“It’s always this combination of slowing growth, persistent inflation and central banks being forced to jump into a slowing economy, which is very negative for markets in general,” Joost van said. Leenders, Senior Portfolio Manager at Kempen Capital Management.
The U.S. consumer price index is expected to register an 8.1% annual rise for September this week, which would mark a slight slowdown in the rate of inflation 8.3% in August.
“Expectations are for a marginal slowdown [in inflation]added Leenders. “It’s not enough for the Fed [to stop raising rates].”
Adding to concerns about the outlook, the IMF warned on Tuesday of “turbulent waters” for the global economy, with a growing risk of a global recession next year and a 25% chance that growth will fall below 2%.
Investors were also braced earlier this week for an upcoming flurry of third-quarter U.S. earnings reports, which will be watched closely for signs of strain as companies grapple with higher prices and lower costs. increasing borrowing.
In a further sign of slowdown fears looming in the markets, oil prices fell on Tuesday – with international benchmark Brent crude falling 1.6% to $94.68 a barrel.
In government debt markets, the yield on the 10-year US Treasury was roughly flat at 3.89% as trading resumed after a holiday day.
The equivalent UK bond yield was also roughly flat that day at 4.44% after the Bank of England widened its emergency bond purchase program to include inflation-linked state funds in the latest effort to stem “fire selling” by pension funds. The 30-year yield fell 0.03 percentage point to 4.78%.
Bond yields rise as their prices fall.
In Asian stock markets, Hong Kong’s Hang Seng closed down 2.2%, touching its lowest level since October 2011. Washington launched new export controls last week to curtail plans to Beijing’s technological self-sufficiency, limiting sales of semiconductors made with American technology sellers obtain an export license.
Additional reporting by William Langley in Hong Kong