Wall Street falls, as European stocks fall again
- The Nasdaq closes at its lowest since the end of 2020
- Global and European equities return to earlier gains
- Chinese stocks fall further as Beijing rushes to fight COVID
- Dollar hits new 2-year high on China COVID fears, Fed bets
- Chart: Overall Asset Performance
WASHINGTON/MILAN, April 26 (Reuters) – U.S. stocks fell on Tuesday, with the Nasdaq posting its biggest one-day rout since September 2020, while European stocks extended losses for a third session as investors waited cautious about US tech earnings and worried about global markets. growth.
China’s COVID-19 curbs and fears of aggressive US Federal Reserve tightening continued to dampen risk appetite and lifted the dollar to new two-year highs.
Oil prices rebounded in volatile trading and gold prices rose on the back of safe-haven buying.
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The tech-heavy Nasdaq led Wall Street lower, closing at its lowest since late 2020. The Dow Jones Industrial Average (.DJI) fell 2.38% to end at 33,240.18 points, while that the S&P 500 (.SPX) lost 2.81% to 4,175.2.
The Nasdaq Composite (.IXIC) fell 3.95% to 12,490.74.
Alphabet Inc (GOOGL.O) and Microsoft Corp (MSFT.O) both fell nearly 4% before their results after the closing bell. About a third of S&P 500 companies are expected to report results this week.
“There’s a lot of anxiety ahead of earnings coming in on Tuesday, Wednesday and Thursday simply because if they don’t hold then there’s nothing left to hold the market back,” said Thomas Hayes, chairman of Great. Hill Capital LLC. At New York.
The MSCI World Equity Index (.MIWD00000PUS) fell 13.6 points, or 2.03%, to 655.01.
The pan-European STOXX 600 index (.STOXX) closed lower, with tech stocks (.SX8P) down 2.3% to six-week lows and banks (.SX7P) down 2.3% . The index had climbed as much as 1% earlier in the session amid strong earnings from companies such as Swiss bank UBS (UBSG.S) and shipping giant Maersk (MAERSKb.CO)
China’s blue-chip index (.CSI300) fell another 0.8% after its worst day in two years on Monday, even as the central bank pledged to step up cautious monetary policy support, especially for small businesses impacted by COVID-19.
Three-quarters of Beijing’s 22 million people lined up for COVID-19 tests as the Chinese capital rushed to stamp out a nascent outbreak and avoid the citywide lockdown that weakened Shanghai for a month . Read more
“There is a little fear of growth, but in our view there will be no immediate slowdown in growth or inflation,” said Mike Kelly, head of global multi-assets at PineBridge Investments. .
But Manishi Raychaudhuri, Asia-Pacific equity strategist at BNP Paribas, said if Chinese lockdowns persisted, it would significantly affect the Chinese economy, impacting global supply chains.
News that Elon Musk had reached a deal to buy Twitter (TWTR.N) for $44 billion in cash buoyed tech stocks on Monday, but shares of the social media platform fell on Tuesday. Tesla fell 12% on fears Musk might sell some of his stake, contributing more than any other stock to sharp declines in the S&P 500 and Nasdaq.
“Tech stocks will remain front and center” as earnings rise this week, analysts at Deutsche Bank Research said in a note.
Investors also watched the Federal Reserve meeting next week. Markets fear that an aggressive rate of tightening from the Fed could derail the global economy, which has only just begun to recover from the pandemic.
The Fed is expected to raise rates by half a percentage point at each of its next two meetings. FEDWATCH
“It is unrealistic to think that the United States can raise interest rates in this way without looking at the real economy,” said Carlo Franchini, head of institutional clients at Banca Ifigest, adding that he was also worried. warmongering signals in Europe.
The European Central Bank’s Martins Kazaks have joined a chorus of policymakers calling for a quick exit from stimulus, suggesting the bank should raise rates soon and has room for up to three hikes this year. Read more
The ECB will then meet on June 9, where policymakers are expected to set a firm end date for bond purchases and provide clearer guidance on interest rates.
U.S. Treasury yields fell on Tuesday as uncertainties surrounding the war in Ukraine and the Fed’s efforts to curb inflation prompted investors to remain cautious about the future despite better-than-expected economic data.
The yield on the benchmark 10-year Treasury fell to 2.73%.
German 10-year yields, the benchmark for the euro bloc, also fell, trading at 0.802%, after falling more than 11 basis points the day before.
In the currency markets, the dollar rose 0.63% against a basket of rivals to hit a new high in two years.
China’s offshore yuan fell against the dollar but remained above Monday’s low for the year at 6.6090 after the People’s Bank of China announced it would cut the amount of currency banks owe hold as reserves.
Oil prices rebounded on China’s plans to support its economy. Brent Crude futures settled $2.67, or 2.6%, at $104.99 a barrel, while US West Texas Intermediate contracts were up $3.16, or 3, 2%, to $101.70.
Spot gold edged up 0.44% at 4:42 p.m. EST (2042 GMT) as investors sought safe-haven assets. Gold futures rose 0.43% to $1,901.40 an ounce. Palladium prices rose 1.99% after Monday’s sharp decline on Chinese demand concerns.
(This story refiles to correct the first paragraph to show that this was the Nasdaq’s biggest one-day drop since September 2020, not September 2008)
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Reporting by Chris Prentice in Washington, Danilo Masoni in Milan and Xie Yu in Hong Kong; additional reporting by Bansari Mayur Kamdar and Sujata Rao in London; Editing by Jonathan Oatis, Andrea Ricci and Richard Pullin
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