US STOCKS DROP AHEAD OF EXPECTED FED RATE HIKES

US STOCKS DROP AHEAD OF EXPECTED FED RATE HIKES

US STOCKS DROP AHEAD OF EXPECTED FED RATE HIKES

US stocks fell and the dollar increased on Friday even when the results of the Treasury yields rose, with traders weighing additional interest rates from the Federal Reserve to fight inflation.

With higher rates, high growth and technology stocks such as Amazon.com INC (Nasdaq: AMZN) and Alphabet (Nasdaq: GOOGL) INC fell more than 2%.

The banking stocks also declined which could potentially break the six-week winning sequence. And a gain-miss by the manufacturer of heavy equipment Deere (NYSE: De) & Co. added to the mood at risk.

Dow Jones Industrial Average decreased 0.84%, to 33,713.26, S&P 500 dropped 1.28%, to 4,228.83 and Nasdaq composite decreased 2%, to 12,704.30.

European equities fell on Friday and registered a weekly loss since the highest jump in the prices of German producers in July was added to the gloom on economic perspectives. The pan-European STOXX 600 finished 0.8% lower.

The MSCI global equity index, which follows stocks in 47 countries, fell by 1.28%.

“When market players start to go back from their vacation and look back … They will find central banks still far from having achieved their objectives for the reintegration of inflation,” ING rates strategists said in a note to customers.

“That means a continuous fight between the hardening of the expectations of the Central Bank and the fears of recession.”

The Federal Reserve needs to continue increasing the costs of the loans to control high inflation, said a series of officials from the US Central Bank. Even they discussed how quickly and how high to lift them.

US Dollar Up

The US dollar benefited from the aggressive comments of the Fed and the precaution of investors, reaching to month-high. The dollar index increased around 0.6% to $ 108.14 and the euro decreased 0.50% to $ 1, 0036.

US Treasury Yields Up

The yields of the US Treasury increased on Friday, imitating the sale of European bonds on inflationary fears.

The 10 -year US treasury yield rose to a maximum of one month at 2, 9794%.

Next Week Planning

Next week, investors will pay close attention to the minutes of the July meeting from the European Central Bank, as well as the comments of the president of the FED, Jerome Powell, when he addresses the annual global central bank conference in Jackson Hole, Wyoming, on August 26.

Oil Up

Oil prices have increased, although on choppy trading, as investors planned a more moderate Fed rate hike which has helped to alleviate fears concerning an economic slowdown that would weaken oil demand.

Crypto Down

The cryptocurrencies fell sharply, and the sudden sale dragged Bitcoin to a minimum of three weeks. It was the last at $ 21,425, more than 8.5% in the day.

Gold Down

Gold went to his first weekly fall in a month after reaching a low of three weeks. Spot Gold fell for a fifth consecutive session, less than 0.5% to $ 1,748 per ounce, in what could be its longest losing run since November 2021.

US STOCKS DROP AHEAD OF EXPECTED FED RATE HIKES