Shares largely slide, yields drop barely after Powell’s inflation feedback

  • S&P 500 drops slightly early
  • Powell: Clock is ‘running’ for Fed on inflation reduction
  • US Dollar is higher

NEW YORK, June 29 (Reuters) – Stocks across global indexes mostly fell and bond yields fell on Wednesday as investors weighed comments by the Federal Reserve Chairman. Jerome Powell, who said there is a risk that the US central bank will raise interest rates that will slow down the economy. too much, but the bigger risk is persistent inflation.

The US dollar index was higher and the MSCI global stock index lower following comments Powell made at a European Central Bank conference. read more

“The clock is running on how long you’ll stay in low-inflation mode. … The risk is that there are multiple shocks where you start to move into a higher-inflation mode, and it’s our job to prevent it. Literally block that. Powell said.

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Investors fear that the Fed’s aggressive push to boost inflation will tip the economy into a recession.

Stan Shipley, fixed income strategist at Evercore ISI, said the market will remain volatile as investors and traders read the economic data they want to see.

“We’re getting slower economic data, some sectors look like they’re in recession, others look pretty good,” Shipley said.

The 10-year Treasury note yield fell 4.9 basis points to 3.158%, while the two-year yield rose 0.2 basis points to 3.126%.

Dow Jones Industrial Average (.DJI) up 96.69 points, or 0.31%, to 31,043.68, S&P 500 (.SPX) lost 1.61 points, or 0.04%, to 3,819.94 and Nasdaq Composite (.IXIC) fell 13.17 points, or 0.12%, to 11,168.37.

Europe-wide STOXX 600 Index (.STOXX) lost 0.69% and MSCI’s gauge of stocks globally (.MIWD0000PUS) down 0.52%.

On forex, the dollar index was up 0.373%, with the euro down 0.39% to $1.0477.

Inflation fears were heightened by oil prices, causing their rally to extend into a fourth day. Worries about tight supply have offset concerns about a weaker global economy. read more

The OPEC+ group of crude oil exporters began a two-day meeting on Wednesday but major policy changes look unlikely, with United Arab Emirates Energy Minister Suhail al -Mazrouei pointed out that his country is pumping almost at full capacity. read more

US crude was recently up 0.89% to $112.76 a barrel and Brent was at $119.19, up 1.03% on the day.

Spot gold fell 0.2 percent to $1,815.79 an ounce.

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Reporting by Caroline Valetkevitch; additional reporting by Sujata Rao in London and Herbert Lash in New York; Edited by Nick Macfie, Will Dunham and Alex Richardson

Our standards: Thomson Reuters Trust Principles.

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