US stocks fall in another volatile day of trading

Investors are weighing prospects for growth against a backdrop of rising prices and tightening monetary policy.

By Bloomberg

US stocks fell in a volatile day of trading as investors weighed prospects for growth against a backdrop of rising prices and tightening monetary policy. Treasuries held gains amid a steady stream of haven bids.

The S&P 500 swung back into the red in the last hour of trading, a day after the biggest single-day drop since June 2020 that erased $1.5 trillion from its market value. The Nasdaq 100 posted modest losses, slipping 0.4% on Thursday. Cisco Systems Inc. slid more than 10% after warning that Chinese lockdowns and other supply disruptions would wipe out sales growth in the current quarter.

Treasury yields were lower across the board amid a growing sense of angst over the health of the global economy and selloff in equity markets. Weaker than forecast US jobless claims and a sharp decline in a regional Philadelphia Fed survey also spurred a burst of buying. Gold gained while the dollar weakened against all of its Group-of-10 counterparts.

The selloff in stocks this week has left the S&P 500 on the brink of notching up its seventh weekly decline, the longest streak since the dotcom bubble burst more than two decades ago. Bets that robust earnings can help investors weather this year’s turbulence were thrown in doubt after US consumer titans signaled a growing impact of high inflation on margins and consumer spending. Meanwhile, Federal Reserve officials reaffirmed this week that tighter monetary policy lies ahead, while investors fretted over stagflation risks.

S&P 500's valuation after selloff is trading below its 10-year average

On the corporate front, Twitter Inc. executives told employees on Thursday that the $44 billion deal to sell the company to billionaire Elon Musk is moving forward as planned. Apple Inc. executives previewed its upcoming mixed-reality headset to the company’s board last week, indicating that development of the device has reached an advanced stage, according to people with knowledge of the matter. Kohl’s Corp. cut its profit and sales outlook in an already tough week for retail companies as inflationary pressures cut into profits.

Elsewhere, the Swiss franc extended its advance versus the dollar after Swiss National Bank President Thomas Jordan said policy makers are ready to act against inflation.

What damage will be done to the US economy and global markets before the Fed changes tack and eases policy again? The “Fed Put” is the theme of this week’s MLIV Pulse survey.

Some of the main moves in markets:

Stocks

  • The S&P 500 fell 0.6% as of 4 p.m. New York time
  • The Nasdaq 100 fell 0.4%
  • The Dow Jones Industrial Average fell 0.8%
  • The MSCI World index fell 0.6%

Currencies

  • The Bloomberg Dollar Spot Index fell 0.9%
  • The euro rose 1.2% to $1.0590
  • The British pound rose 1.2% to $1.2495
  • The Japanese yen rose 0.4% to 127.71 per dollar

Bonds

  • The yield on 10-year Treasuries declined four basis points to 2.85%
  • Germany’s 10-year yield declined eight basis points to 0.95%
  • Britain’s 10-year yield was little changed at 1.86%

Commodities

  • West Texas Intermediate crude rose 1.7% to $111.44 a barrel
  • Gold futures rose 1.4% to $1,847.70 an ounce

–With assistance from Ksenia Galouchko, Srinivasan Sivabalan, Robert Brand, Isabelle Lee and Peyton Forte.

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