For the second consecutive day, Wall Street experienced a decline, and both European and Asian markets also saw a decline. Meanwhile, U.S. Treasury Secretary Janet Yellen made efforts in China on Thursday to reduce tensions between the two largest economies in the world.
The S&P 500 and the Dow Jones Industrial Average futures declined by 0.5%.
Recently, the prices of shares have greatly increased as there is growing evidence that the U.S. economy is progressing well and managing to avoid recession despite high interest rates. However, the Federal Reserve is currently facing a challenge in its efforts to combat inflation, and a thriving economy is not what it currently requires.
Minutes from the most recent policy meeting of the Federal Reserve made public on Wednesday, indicated that a few officials from the central bank were inclined to increase interest rates in mid-June. However, ultimately all members agreed unanimously to maintain the rates at their current levels. The possibility of additional rate hikes has been negatively impacting investor confidence.
The job situation in the United States is a particular focus for the Federal Reserve.
On Thursday, the Labor Department will publish the weekly job figures, as well as a report on job opportunities. Additionally, on Friday, they will provide essential monthly employment data.
Shares of Meta Platforms, the company that owns Facebook, Instagram, and WhatsApp, increased by 1.9% following the launch of its new app Threads. Thread is a competitor to Twitter, which has faced challenges since being acquired by Elon Musk. Meta’s shares have already experienced a significant increase this year, more than doubling in value.
After Goldman Sachs downgraded Chinese banks, citing worries about the economy’s slowdown and their connection to debt, there was a significant decrease in the Hang Seng index in Hong Kong, dropping by 3% to 18,533.05. Similarly, the Shanghai Composite Index also experienced a decline of 0.5% to 3,205.57.
Shares of China Construction Bank Corp. listed on the Hong Kong stock exchange experienced a decline of 2.8%. China Merchants Bank also saw a drop of 1.4%, while the Industrial and Commercial Bank of China faced a significant decline of 3.2%.
The Nikkei 225 index in Japan decreased by 1.7% and closed at 32,773.02. In Australia, the S&P/ASX 200 index dropped by 1.3% to 7,157.80, and the Kospi index in Seoul lost 1.1% and reached 2,551.10. However, India’s Sensex index gained 0.3%, Taiwan experienced a 1.7% decrease in shares, and Bangkok saw a 1.1% decline.
At noon, the CAC 40 in Paris experienced a decrease of 1.8%, while Germany’s DAX and Britain’s FTSE 100 both saw a decline of 1.2%.
There is growing optimism that inflation is decreasing to a point where the Federal Reserve might soon halt its increases in interest rates, which have been reducing inflation by slowing down the overall economy. Many individuals in the finance industry anticipate that the Fed will raise rates sometime this month and maybe once more before the end of the year, based on hints given by the Fed.
The U.S. stock market may experience a period of inactivity as everyone anticipates whether the predicted recession will occur. The forthcoming earnings reporting season could provide hints, as companies reveal their earnings from the spring, giving investors some insight.
Bond market yields were varied, with the yield on the 10-year Treasury increasing to 3.97% from 3.94% on Tuesday. The 10-year yield determines interest rates for mortgages and other significant loans.
The yield on the two-year Treasury, which is more responsive to predictions about the Federal Reserve, slightly increased from 4.95% to 4.96%.
In different trading, the price of U.S. benchmark crude oil increased by 30 cents to reach $72.09 per barrel on the New York Mercantile Exchange online platform. The previous day, it had risen by $2 to $71.79 per barrel.
The price of Brent crude, which is used as the foundation for global trading, increased by 22 cents, reaching $76.87 per barrel.
The value of the American dollar decreased to 143.74 Japanese yen compared to the previous rate of 144.64 yen. On the other hand, the euro experienced a slight increase and moved up to $1.0896 from $1.0857.
The S&P 500 experienced a slight decline of 0.2% on Wednesday, dropping from its peak since April 2022. The Dow also saw a decrease of 0.4%, while the Nasdaq returned 0.2% of its gains.