U.S. and World Markets Remain Under Pressure After 2% Selloff Previous Week

Barry Adams
26 Jun, 2023
New York City

Stocks on Wall Street looked down after major indexes declined 1% in the previous week. 

The S&P 500 index and the Nasdaq Composite index turned lower in early trading as investors assessed the implications of higher rates staying longer and looming economic slowdown. 

The tech stocks driven eight-week rally halted last week after Fed Chairman Powell reminded investors that the central bank is not done with raising rates. 

The Federal Reserve is expected to raise rates at least by 25 basis points two times before the end of 2023, according to the latest projections provided by the central bank while announcing its rate decision on June 14. 

Over the weekend, crude oil traded volatile and natural gas prices shot up more than 10% in European trading after Russia's mercenary forces ended its rebellion. 

Yevgeny Prigozhin led Wagner Group gave up on its plan to march to Moscow, but not before challenging Russian president Vladimir Putin's 23-year hold on power. 

Prigozhin agreed to exile in Belarus, according to Kremlin controlled news services Pravda. 

Crude oil jumped 2% before its retreat and the Russian ruble plunged to a 13-month low of 87 against the U.S. dollar before recovering to 84.40.. 

In Europe, market indexes struggled to advance after dropping 2% in the previous week when central banks of the UK, Norway, Turkey and Switzerland lifted key lending rates. 

The 50-basis point rate hike in the UK also fueled worries that as many as 800,000 mortgage borrowers may face higher monthly payments at the time of repricing loans in the second half of 2023, further dampening economic activities. 

Most mortgages in the UK are either 2-year or 5-year terms, unlike 15-year or 30-year mortgages in the U.S. 

Chinese stocks extended losses for the seventh day in a row after trading resumed following an extended weekend to celebrate Dragon Boat Festival. 

The CSI 300 index closed down 1.4% and extended decline to 9.3% from a high in January on the ongoing economic worries, demographic challenges and high level of debt across all levels of government. 

 

U.S. Indexes & Yields 

The S&P 500 index futures decreased 0.01% and the Nasdaq Composite declined 0.03%.

The yield on 2-year Treasury notes increased to 4.73%, 10-year Treasury notes inched lower to 3.70% and 30-year Treasury bonds edged down to 3.79%. 

Crude oil increased $0.22 to $69.38 a barrel and natural gas prices increased 1 cent to $2.73 a thermal unit. 

 

U.S. Stock Movers

Lucid Group jumped 9.4% to $5.47 after the company signed an agreement with the UK-based Aston Martin to supply power train and battery systems. 

Aston also agreed to sell 3.7% stake in the company to Lucid for $232 million. 

Carnival Corp increased 1.9% to $16.10 ahead of the release of the company's quarterly results. 

Cruise stocks have been on upswing since April on the expectations of a rebound in reservations after travel demand recovered following the Covid-19 pandemic. 

PacWest Bancorp jumped 7% to $7.71 after the company sold a $3.5 billion specialty finance portfolio of senior and secured maturities to Ares Management.