Fears of a mixed economy continue to weigh on investors as US stocks close

Fears of a mixed economy continue to weigh on investors as US stocks close

U.S. stocks closed mixed on Wall Street Thursday, recovering early losses after banks reported lower earnings, dragging markets lower.

The S&P 500 closed down 11 points, or 0.3%, at 3,790. The Dow Jones Industrial Average lost 0.5% and the tech-heavy Nasdaq rose slightly .03%. Banks were the biggest weight on major indexes following weak earnings and a warning from JPMorgan Chase.

US stocks later sank High US inflation Expectations are stoked More rate hikes Investors worry that economic growth will cool. Investors fear that aggressive moves by the Fed and other central banks to cool four-decade high inflation could derail global growth.

“Growth fears are hitting markets more than inflation concerns,” Stephen Innes of SPI Asset Management said in a report.

On Wednesday, the S&P 500 lost 0.4%. The Dow was down 0.7% and the Nasdaq Composite was down 0.2%.

Traders expect another Fed rate hike this month, likely matching last month’s 0.75 percentage point increase, the biggest in 28 years and three times the usual margin.

Bank stocks have been hit hard this year as investors worry about the Federal Reserve’s drag on the U.S. economy in recession To combat inflation. A recession means some Americans will lose jobs, and possibly start falling behind on their debt. These fears are outweighed by the higher revenues that banks have gained from higher interest rates.

Weak earnings reports also dragged down bank stocks. JPMorgan Chase profit fell 28% in the second quarter, the bank reported Thursday, as it tries to navigate an economy that is showing strength in many areas but is losing steam amid rising interest rates that are hitting consumers and businesses alike. Inflation at the wholesale level rose 11.3% in June from a year ago. This follows a worrisome report on Wednesday that showed prices at the consumer level remained high.

Fed officials say a recession is possible but not certain. They are an instruction Strong US job market Despite high borrowing costs.

Taking a more critical stance, JPMorgan Chase CEO Jamie Dimon warned in a statement that while the U.S. economy is growing and the job market and consumer spending are firming, a number of factors “could negatively impact the global economy at some point” on the road, consumer confidence. including the Federal Reserve’s efforts to shrink and bring decades of high inflation under control.


A Fed rate hike would force homebuyers out of the market

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“U.S. consumers are almost single-handedly driving the global economy,” Andrew Hunter, senior U.S. economist at Capital Economics, said in a research note in June. Recent consumer spending data Suggests that consumers have started to reduce their spending on goods and services. Experts say this could be one of the first signs that inflation is too high.

Traders await the latest quarterly results from major US companies over the next few weeks.

In energy markets, benchmark U.S. crude fell $1.26 to $95.04 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 46 cents to $96.30 on Wednesday. Brent crude, the price base of international oil trade, was down $1.06 to $98.51 a barrel in London. It added 8 cents to $99.57 a barrel in the previous session.

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