US stocks erased gains in a choppy session that saw the benchmark bounce between gains and loss after dropping to the lowest intraday level since 2020.
(Bloomberg) — US stocks erased gains in a choppy session that saw the benchmark bounce between gains and loss after dropping to the lowest intraday level since 2020.
The S&P 500 turned lower amid renewed selling in tech shares that sent the Nasdaq 100 down more than 1%.
The dollar reversed declines, while Treasury yields edged higher.
Risk sentiment remained fragile after a four-day losing streak wiped $1.6 trillion off the value of the S&P 500 Index. US inflation data Thursday may seal the case for another 75-basis-point interest-rate increase at the Federal Reserve meeting in the absence of a major shortfall.
Nor have officials given any inclination to pause their rate-hiking cycle in the near future, with Cleveland Fed President Loretta Mester saying Tuesday officials need to keep raising interest rates and cannot get complacent.
In addition to inflation data, big US banks kick off the third-quarter earnings season in earnest later this week, with strategists braced for weak profits against a drumbeat of warnings over the rising risk of a global recession.
The International Monetary Fund joined the refrain, warning of a worsening outlook as efforts to curb inflation may add to damage from the war in Ukraine and China’s slowdown.
“We have not seen the impact of tightening,” Michael Kelly, head of the multi-asset team at PineBridge Investments told Bloomberg TV.
“That lies ahead and when we see that, it’s another leg down for risk assets.”
Turmoil in UK bond markets eased Tuesday as the Bank of England was forced to expand its emergency measures to include inflation-linked debt in an effort to avert what it called a “fire sale” that threatens financial stability.
Meanwhile, Russian President Vladimir Putin threatened further missile attacks on Ukraine after hitting Kyiv and other cities in the most intense barrage of strikes since the first days of its invasion.
“It’s little wonder investors enter the week in a dreary mood, especially with headlines from Ukraine signaling a further escalation in geopolitical tensions,” Christopher Smart, chief global strategist at Barings, said in a note.
With world growth under pressure, US oil futures tumbled about 2%, giving up more of last week’s 17% rally.
Key events this week:
- Earnings this week include: JPMorgan Chase & Co., Citigroup Inc., Morgan Stanley, BlackRock Inc., Delta Air Lines Inc., UnitedHealth Group Inc., U.S.
Bancorp, Wells Fargo & Co.
- Fed’s Loretta Mester speaks, Tuesday
- BOE’s Andrew Bailey speaks, Tuesday
- FOMC minutes for September meeting, Wednesday
- US PPI, mortgage applications, Wednesday
- OPEC Monthly Oil Market Report, Wednesday
- Fed’s Michelle Bowman and Neel Kashkari speak
- ECB’s Christine Lagarde speaks
- US CPI, initial jobless claims, Thursday
- G-20 finance ministers and central bankers meet, Thursday
- China CPI, PPI, trade, Friday
- US retail sales, business inventories, University of Michigan consumer sentiment, Friday
- BOE emergency bond buying is set to end, Friday
Some of the main moves in markets:
Stocks
- The S&P 500 fell 0.4% as of 2:54 p.m.
New York time
- The Nasdaq 100 fell 1.1%
- The Dow Jones Industrial Average rose 0.4%
- The MSCI World index fell 0.8%
Currencies
- The Bloomberg Dollar Spot Index was little changed
- The euro rose 0.3% to $0.9728
- The British pound was little changed at $1.1057
- The Japanese yen was little changed at 145.77 per dollar
Cryptocurrencies
- Bitcoin fell 1.3% to $18,987.84
- Ether fell 2.2% to $1,279.12
Bonds
- The yield on 10-year Treasuries advanced four basis points to 3.92%
- Germany’s 10-year yield declined four basis points to 2.30%
- Britain’s 10-year yield declined three basis points to 4.44%
Commodities
- West Texas Intermediate crude fell 2.7% to $88.67 a barrel
- Gold futures rose 0.6% to $1,685 an ounce
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