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Stock market down on worries over US economic recovery

Stock market down on worries over US economic recovery

US stocks fell from near-record highs on Tuesday as traders returning from a long weekend are concerned that the economic recovery is slowing.

The S&P 500 Index showed a decrease of 0.25%. Meanwhile, the shares of large tech companies, including Netflix Inc., Amazon.com Inc., and Apple Inc., posted gains, thus pushing the Nasdaq-100 upwards. European stock markets tumbled as investors speculated that that euro-zone policymakers may get ready to roll back stimulus. The US dollar is trading higher for the second straight day amid rising bond yields and declining commodity prices, which allowed the greenback to rally the most since August 26.

A deep drop in equities came after investors left for a three-day holiday on Friday as markets approached record highs following the release of a much weaker-than-expected jobs report in the US. There won't be much data this week to ease market worries for the third quarter, as growth estimates have already been downgraded recently. At the same time, fears that the Delta variant is affecting the reopening of the US economy are putting pressure on the market.

Stock market down on worries over US economic recovery

"Concerns over the delta variant weigh on overall third quarter growth," said Haris Khurshid, portfolio manager at Fate Capital Management. "The next few weeks are going to be quite difficult. We are seeing investors become more picky with their stocks, not only because of the delta concern, but also because of weakening fiscal stimulus, legislative policies and a general slowdown in the recovery of some sectors."

According to the data released on Tuesday, China's exports and imports grew faster than expected in August, easing some fears that the pandemic is delaying economic recovery and causing disruption to the global supply chain. Despite this, investors remain nervous about the outlook for slower growth and reduced monetary support outside the US, especially in Europe.

This week, investors should pay attention to the following key data:

- US President Joe Biden may announce his decision on whether to reappoint Fed Chairman Jerome Powell for a second term;

- on Wednesday, Dallas Fed President Robert Kaplan holds a virtual town hall discussion;

- on Thursday, ECB President Christine Lagarde holds a press conference after the bank's decision on the rate;

- on Thursday, China's PPI, CPI, new yuan loans, money supply, and total financing data will be published.

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade
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