US Stocks Waver on Turbulent Trading 07/06 10:42
Stocks wavered between small gains and losses in morning trading on Wall
Street Wednesday as worries about inflation, rising interest rates and a
potential recession weigh on the broader market.
NEW YORK (AP) -- Stocks wavered between small gains and losses in morning
trading on Wall Street Wednesday as worries about inflation, rising interest
rates and a potential recession weigh on the broader market.
The S&P 500 fell 0.3% as of 11:07 a.m. Eastern. The Dow Jones Industrial
Average fell 94 points, or 0.3%., to 30,873 and the Nasdaq fell 0.2%.
Technology companies gained ground and helped check losses from energy
companies. Chipmaker Nvidia rose 1% and Exxon Mobil fell 4.4% as crude oil
Major indexes have been swinging between sharp losses and gains on a daily,
and sometimes hourly, basis. The broader market, though, is still mired in a
deep slump that has dragged the S&P 500 into a bear market, over 20% below its
most recent high.
Wall Street's key concern centers around the Federal Reserve's effort to
rein in inflation, and the risk its plan could send the economy into a
Inflation has squeezed businesses and consumers throughout the year. Its
grip tightened after Russia invaded Ukraine in February and as China locked
down several key cities to contain rising COVID-19 cases, which worsened supply
Surging oil prices worsened inflation by sending gasoline prices in the U.S.
to record highs. U.S. crude oil prices are still up 27% for the year but have
been slipping throughout the week in a welcome sign for the market hoping for
any signal that inflation could be easing.
U.S. crude oil prices fell 3.2%. Prices on Tuesday settled below $100 a
barrel for the first time since early May.
Central banks have been raising interest rates in an attempt to temper
inflation. The Fed has been particularly aggressive in its shift from
historically low interest rates at the height of the pandemic to unusually big
rate increases now. That has raised concerns that the central bank could go too
far, hitting the brakes too hard on economic growth and bringing on a recession.
Energy prices easing now could mean lower gas prices in a few weeks and
could signal that inflation is peaking, along with a cooling housing market.
"This takes the pressure off the Fed," said Katie Nixon, chief investment
officer for Northern Trust Wealth Management. "If we can see gas prices go
down, that will pull through to consumer sentiment and that could give the Fed
the ability to at least take some of the pressure off."
Wall Street will get another update on the Fed's latest thinking this
afternoon when the central bank releases minutes from its most recent policy
Investors are closely monitoring economic data for clues about inflation's
impact, its trajectory, and what that means for the Fed's position moving
forward. A government report on job openings in May beat economists'
expectations in a sign that the employment market remains healthy. A report on
the U.S. services industry showed that the sector's growth slowed less than
expected in June.
Wall Street will be closely watching the U.S. government's release of
employment data for June on Friday.
European markets were broadly higher.
The euro is at a 20-year low to the dollar on worries over disruptions to
energy supplies. European Commission chief Ursula von der Leyen said the
27-nation European Union needs to make emergency plans to prepare for a
complete cut-off of Russian gas amid the Kremlin's war on Ukraine.