4:10pm: Nasdaq Composite, S&P 500 salvage winning days
The Dow ended Tuesday down 126 points, 0.4%, at 30,967, the Nasdaq Composite added 194 points, 1.8%, to 11,322 and the S&P 500 ticked up 6 points, 0.2%, to 3,832.
Early in the session, the Dow was down roughly 700 points. Despite the broad reversal of fortune, certain stocks thought to be linked to economic growth took a hit. Shares of Caterpillar Inc fell more than 2% to $173.94, the lowest closing price of the year so far.
The question remains whether the US is headed for a recession. In a note to clients Thursday, Credit Suisse strategist Jonathan Golub said no, but he also lowered his S&P 500 target for the end of 2022 to 4,300 from 4,900.
“Recessions are most accurately characterized by a meltdown in employment accompanied by an inability of consumers and businesses to meet their financial obligations," Golub wrote, as reported by CNBC. "While we are currently experiencing a meaningful slowdown in economic growth (from extremely high levels), neither of the above conditions are present today."
12.05pm: Sell-off continues
US stocks remained in the red at noon amid prevailing investor concerns over high inflation, rising interest rates, and plummeting consumer confidence and spending.
At midday, the Dow Jones Industrial Average had shed 588 points at 30,509 points and the S&P 500 was down 60 points at 3,765 points.
The tech-laded Nasdaq Composite had pared losses from earlier in the day, down 38 points at 11,090 points.
IG chief market analyst Craig Beauchamp said the return of US traders from their holiday had dealt the death blow to European traders, dragging them into the red too.
“This recurrence of selling has put indices across the board into the red, as growth and inflation fears return right on cue,” he said. “Normally July provides some welcome relief to markets after a choppy June, but so far the instinct to sell any bounce, no matter how small, remains all-encompassing.”
He noted that commodities had also taken a hit today. “As supply concerns give way to seemingly-inescapable recession worries, oil and mining stocks have gone deep into the red, a situation that has been replicated on Wall Street too,” Beauchamp said.
10.50am: Proactive North America headlines:
Majuba Hill Copper begins deep core program at its flagship porphyry copper project in Nevada
Sidus Space says partner's satellite orbital deployer achieved space qualification with successful launch
Nickel North Exploration reveals big increase in inferred resource for its Hawk Ridge nickel-cobalt-PGE sulphide project in Québec
Royal Helium says extremely pleased with results of Nazare production modelling simulation
Bridgeline Digital highlights record rate of new customer wins and renewals in fiscal 3Q update
QC Copper and Gold reports promising drill assays from Opemiska Copper-Gold Property in Quebec
Aftermath Silver (TSX-V:AAG) welcomes latest drill assays from Berenguela silver-copper-manganese project in Peru
Vuzix says it has received and begun delivering a follow-on smart glasses order valued at over $350,000 for a large US multinational retailer
Real Luck Group appoints gaming industry veteran Daniel Sanders as its director of marketing
Progressive Planet Solutions expands into custom-blended regenerative fertilizer and soil amendment production
PyroGenesis Canada delivers plasma torch system to major international iron ore pellet producer client
Mason Graphite says its joint venture with Nouveau Monde Graphite (TSX-V:NOU) has the blessing of independent proxy voting advisors
DGTL says subsidiary Engagement Labs (TSX-V:EL) wins $1M service contract from global leader in digital audio content
Electric Royalties notes filing by Manganese X Energy Corp (TSX-V:MN, OTCQB:MNXXF) of PEA for Battery Hill manganese project in New Brunswick
BioHarvest Sciences reports strong 2Q sales of VINIA wellness product as production scales up at new Israel facility
Lingo Media launches new English language learning course as global demand surges for qualified teachers
Ultra Lithium set to kick off drilling at the Georgia Lake lithium property in Ontario
Audacious announces appointment of Jill Swainson to its board of directors
SoLVBL Solutions files US provisional patent application for its authentication seal in digital voting
FPX Nickel appoints Cooper Quinn as new CEO of carbon capture subsidiary CO2 Lock
Royal Fox Gold (TSX-V:FOXG) says latest drilling at Philibert project will add 'significant near-surface gold ounces' to resource
First 'sand battery' developed to heat homes or balance renewable energy for grid
Scottie Resources starts 2022 drill program as it looks to expand high-grade Blueberry Contact Zone
Soma Gold expects further earnings growth as it ramps up output from El Bagre operation
Planet 13 Holdings closes US$3.3M purchase of Florida land for staged cultivation facility
Nextech AR Solutions Corp announces plans to spin-out ARitize Maps for direct listing on CSE
Victory Resources adds to its lithium property portfolio in Quebec
i-80 Gold starts shipping Granite Creek ore to Nevada Gold Mines
Plurilock wins DEFEND order from customer service platform provider Agents Only
9.40am: Analysts warn US growth slowdown is ‘worse than expected’
US stocks opened lower on Tuesday as clear signs the US economy is losing momentum amid high inflation and tightening monetary policy weighed on the minds of investors.
Just after the open, the Dow Jones Industrial Average had shed 503 points at 30,595 points.
The S&P 500 had dipped 65 points at 3,761 points and the Nasdaq Composite was down 201 points at 10,927 points.
This comes as strategists at Morgan Stanley (NYSE:MS) said the slowdown in US growth was worse than expected amid the Ukraine war and China’s Covid-zero policy.
Strategists led by Michael Wilson wrote in a note that, if equity markets failed to rally further, the S&P 500 could sink to 3,000 points, about 22% below its latest close.
6:30am: More falls, more volatility
US stocks are expected to open lower on Tuesday as trading starts in earnest after the Independence Day holiday with expectations that the US will soon start rolling back tariffs on imports from China bringing only some short-lived cheer to the market.
Prevailing concerns about the rising trajectory for inflation and interest rates are proving hard to displace, however, and stock futures were back under pressure before long.
Futures for the Dow Jones Industrial Average were trading 0.4% lower pre-market, while those for the broader S&P 500 index were down 0.4% and futures for the tech-laden Nasdaq-100 were off 0.5%.
Naeem Aslan, chief market analyst at avatrade.com said: “Higher inflation has created a significant threat to the US economy, and there are higher chances of the US economy falling into a recession. Investors believe that if President Biden rolls back some of the Trump administration tariffs on China, it will positively impact inflation, meaning we could see inflation numbers falling but not significantly."
Some investors are holding out hope that the second half of the year may prove a little better for equity markets. The first half of the year was particularly rough for stocks, with the S&P 500 index recording its worst performance since 1970. But any move to adjust tariffs on Chinese imports is only likely to ease inflation slightly and broader price pressures look like they are here to stay.
There are also key data coming out this week that will help decide market direction.
“Two important economic events are taking place this week, and traders are highly likely to focus on them. First, we will get the Fed Minutes which will give us more clarity about the Fed’s think behind their current hawkish monetary policy,” said Aslam.
The Federal Reserve policy meeting minutes are due at 2.00pm ET on Wednesday.
“Secondly, and more importantly, the US NFP data will be coming out on Friday. Remember, the Fed pays close attention to the US job market, and any significant weakness in the US job market could easily force the Fed’s hand to change the direction of its monetary policy,” he added.
In energy markets, WTI crude oil futures were up 0.3% at $108.71 a barrel while Brent crude futures were 0.7 % higher at $112.35.
Contact the author at jon.hopkins@proactiveinvestors.com