Wall Street closed out a week, month and quarter to forget, sending the selective S&P 500 to a new low for this year as investors fear central bank moves to curb inflation translate into a global recession.
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All three indicators posted sharp losses this week: eThe Dow Jones and the S&P 500 fell 2.9%, while the Nasdaq, which brings together the main technology companies, fell 2.7%. Friday marked the last day of the month and the third quarter.
In September, the S&P 500 was down 9.3%, while the Dow was down 8.8% and the Nasdaq lost 10.5%. Stocks ended the third quarter on a bearish note. The benchmark S&P 500 index lost 5.3% during the quarter, the Dow dropped 6.7% and the Nasdaq ended the quarter down 4.1%.
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Investor optimism has faded, according to The Wall Street Journal. “In the tradeoff between growth and inflation, the Fed will choose inflation,” said Desmond Lawrence, senior investment strategist at State Street Global Advisors, in remarks reported by the newspaper. “That’s what’s really causing the turmoil that we’ve had in the last week in particular,” he added.
The expectation that stock prices will fall over the next six months this week rose to the highest level since March 2009, according to the American Association of Individual Investors.
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By sectors, in the last three months, the only one that closed in green was non-essential goods (4.45%), while the biggest losses in the quarter were for real estate (-13.17%), real estate essential (-12.59%) and raw materials (-9.12%).
The yield of the 10-year Treasury bonds – which at the close of trading today rose to 3.806% – has increased throughout the quarter driven by higher inflation and fears of a tighter monetary policy.
The yield on the 10-year US Treasury Bond once again set highs not seen in more than a decade and reached 4% as a result of the aggressive policy of the US Federal Reserve (Fed) in raising short-term interest rates to try to curb rampant inflation. However, when the New York Stock Exchange closed two days ago, the 10-year yield fell to 3.733%, its steepest one-day drop since 2020.
Texas crude lost 24.8% during the quarter, closing Friday at $79.49 a barrel. Gold rose on Friday but still fell 7.9% in the quarter and has been down for six straight months.
For its part, the dollar today gained ground against the euro, with a change of 0.9798. The rises in interest rates in recent months have also influenced the strengthening of the dollar.
The main European stock markets closed higher on Friday despite inflation figures and after a week of worries. The Paris stock market gained 0.68%, Madrid 0.91%, Frankfurt 0.48%, Milan 1.45% and London 0.15%.
AFP
