Wall Street drives stocks lower, dollar higher on Fed hike fears

  • Technology and growth stocks drag indices down
  • Treasury yields rise
  • Gold and Crypto Prices Are Also Slipping
  • Oil muted in choppy exchanges

Aug 19 (Reuters) – U.S. stocks fell and the dollar rose on Friday even as Treasury yields rose as traders eyed further interest rate hikes from the Federal Reserve to fight inflation.

With higher rates looming, high-growth and technology stocks such as Amazon.com Inc (AMZN.O) and Alphabet Inc (GOOGL.O) fell more than 2%. Banks declined and were on track to end the week down, potentially ending their six-game winning streak. And a shortfall from heavy equipment maker Deere & Co. (DE.N) added to the risky mood. Read more

The Dow Jones Industrial Average (.DJI) fell 0.71% to 33,758.75; the S&P 500 (.SPX) fell 1.21% to 4,231.87; and the Nasdaq Composite (.IXIC) fell 2% to 12,702.45.

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European stocks fell on Friday and posted a weekly loss as the highest-ever rise in German producer prices in July clouded the economic outlook. The pan-European STOXX 600 (.STOXX) ended down 0.8%. Read more

The MSCI World Equity Index (.MIWD00000PUS), which tracks stocks from 47 countries, fell 1.25%.

“When market participants start to return from their holidays and look back…they will find that central banks are still a long way from meeting their inflation-control targets,” ING rate strategists said. in a note to customers.

“It means an ongoing struggle between central bank tightening expectations and recession fears.”

The Federal Reserve must continue to raise borrowing costs to rein in high inflation, a series of U.S. central bank officials said on Thursday, even as they debated the speed and depth of their hike. Read more

The US dollar benefited from hawkish comments from the Fed and cautious investors, hitting a one-month high. The dollar index rose about 0.5% to $108.05 and the euro fell 0.4% to $1.004.

US Treasury yields rose on Friday, mimicking European bonds’ own sell-off on inflation fears.

The 10-year US Treasury yield climbed to near a one-month high of 2.9794%.

Next week, investors will pay particular attention to the minutes of the European Central Bank’s July meeting, as well as comments from Fed Chairman Jerome Powell when he addresses the annual conference of the European Central Bank. world central banks in Jackson Hole, Wyoming, on August 26.

“Incoming data, on the net, suggests that the US economy retains fairly healthy momentum,” Michael Gapen, an economist at Bank of America, wrote in a client note. He cited improving data on motor vehicle assembly and retail sales, but noted a drop in housing numbers.

“Incoming data was not uniformly strong…and we note stronger momentum will eventually be met with further firming in policy rates,” Gapen added.

OIL UP, GOLD AND CRYPTO DOWN

Oil prices rose, albeit in choppy trade, as investors anticipated a more subdued Fed rate hike path that helped ease fears of an economic slowdown that would weaken demand for crude. Read more

U.S. crude rose 0.41% to $90.86 a barrel, while Brent was at $96.56, virtually flat on the day.

Cryptocurrencies fell sharply, with sudden selling dragging bitcoin to a three-week low. It was last at $21,425, down more than 8.5% on the day. Read more

Gold was heading for its first weekly decline in a month after hitting a three-week low. Spot gold fell for a fifth straight session, down about 0.5% to $1,748 an ounce in what could be its longest losing streak since November 2021.

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Reporting by Lawrence Delevingne in Boston and Elizabeth Howcroft in London; Editing by Chris Reese, Nick Macfie and Jonathan Oatis

Our standards: The Thomson Reuters Trust Principles.

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