Tech stocks cut losses on Monday morning, leading the S & P gains amid fears of an economic lockdown.
Today, Wall Street begins on a high note, with tech stocks rebounding, but investors remain cautious about the market. The COVID-19 outbreak in China remains a concern for Wall Street boys, and the talk of an economic slowdown is on the table to be discussed.
The Twitter stock skyrocketed today. As of now, Twitter shares rose by 5.85% after releasing the news that Elon is the new CEO. Twitter Inc has accepted Musk’s offer for a private takeover for $44 billion. The S&P climbed by 0.03% on Monday morning, but by Monday evening, the index fell by 0.13%. The Nasdaq index rose by 0.39%, yet it still has too much to catch up on and recover from last week’s closing losses. The Dow Jones industrial average rose by 0.27% on opening morning.
Moving forward, the 10-year treasury yield in the United States fell by 3.7% to 2.8. The fast rebound in tech stocks was due to the positive quarterly results for major tech brands. Google led the gains. AT & T stock rose after releasing the best results for postpaid phones in decades. On the other hand, Apple, Meta, and Amazon were successfully able to cut the losses and increase their earnings this morning.
This positive news has helped oil prices cool down; crude oil is below the $100 level for the first time since last Monday. Gold remains in a downtrend direction and is now worth about $1902 per ounce.
However, cutting losses isn’t enough, especially with all that’s going on now. The Federal Reserve will increase its interest rates by 50% at the next meeting, which is expected on the fourth or fifth of next month. The Russian war and military operations are driving energy and food prices to higher levels by more than 50% in some countries.
Now the COVID outbreak in China is threatening the global supply chain, especially the semiconductor industry. Different reports found that energy stocks are down by 2% while tech stocks are still up by over 5% in 12 months.
The Shanghai lockdown led to a sharp decline in oil prices of more than 5%, yet what does that mean?
Wall Street experts are having mixed thoughts and opinions about the current situation. Some say the new COVID outbreak may be considered a strong indicator for an upcoming recession and economic slowdown.
The U.S. energy and food prices will certainly be affected if the China situation chooses to take a more complex direction. As we head to the second interest hike, the Federal Reserve might become ultra-aggressive and increase its rates by 75%.
Nothing is certain for the time being, but if the Chinese lockdown lasts too long, the US economy will be in one of its worst slumps since 1982, if not worse. Food prices and energy prices are already affecting the average consumer’s buying abilities and priorities. If not for its fast labor force recovery and income increases, things could have gone negatively.
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