U.S. jobless claims rose by 19.000, lower than the estimate of 21.000, and Wall Street fell amid fears of a looming recession.
For the first time in four weeks, the Nasdaq and S&P 500 fell sharply in Wednesday’s trading session. The stock market turmoil was caused by worries about rental sales and manufacturing activities in the U.S. January retailers’ and manufacturers’ activities declined sharply, recording one of the worst monthly gains in the past six months.
On Tuesday morning trading hours, the Wall Street main index declined moments after the release of a lower-than-expected elected jobless claims report.
Based on initial forecasts by Econoday, the unemployment claims were expected to rise up to 21.000. The Bureau of Labor Statistics jobless claims reports showed that the claims were up by only 19.000.
Following Thursday’s disappointing jobless claims data, all major indexes fell. The S&P 500 feature declined by 0,87%. Nasdaq and tech stock gains were much lower than expected. Tesla’s stock declined gnarly by 1.2%, while Microsoft dodged the roses but remains close to a lower gain. Netflix’s stocks crashed by 1,79%, Amazon Inc. is down by 2,20%, and Apple slipped back by 0,4%.
Nasdaq’s feature declines by a total of 100 basis points (0.92%). and the Dow Jones average industry is down by 0.33%. Based on the data shown by economists and Wall Street, the S&P 500 and the Nasdaq had their worst single-day performances since mid-December.
Meanwhile, oil prices jumped as worries about a looming recession came back to the surface. Market volatility and fears of higher interest rates appear to be supporting and boosting commodity market gains. During times of market uncertainty, gold remains an appealing asset; the index is now trading at $1920 per ounce.
Brent oil prices jumped by 1.25 percent to a market price of $86 per barrel. The West Texas Intermediate rose by 1,07% to $80 per barrel, and natural gas prices declined to an average of $3.29 per gallon.
Moving to the bond market, mortgage rates in the U.S. recorded their third straight weekly decline in January. The U.S. 10-year Treasury yields jumped by 1,24% to 3,417, rising from the previous increase of 3,93.
The weak retail sales, the decline in Wall Street stocks, and the inflation pressure are driving some parties to call for more interest rate hikes. According to James Bullard, president of the St. Louis Fed, the FED should continue to raise interest rates by 5%. Taming inflation to a target point of 2% can’t be accomplished by increasing interest rates by a lower rate. According to Bullard, the FED is obligated to raise interest rates as soon as possible.
In terms of the economy’s future outlook, the U.S. economy is expected to have a short recession phase in the following months. This fact is causing massive turmoil among investors, and some call for a fast solution to prevent further market losses.