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NEW YORK (Dow Jones) – Geopolitical tensions and rate hike concerns weighed on Wall Street on Tuesday. Reports made the rounds on the market that the Chinese Air Force had violated Taiwan’s airspace. But the increasingly louder discussion about tightening monetary policy weighed even more heavily. Now even US Treasury Secretary Janet Yellen brought rate hikes into play.
But after the initial shock was digested, the indices recovered from their daily lows. The Dow Jones index even turned 0.1 percent to 34,133 points in the plus. The S&P 500 and Nasdaq Composite were down 0.7 and 1.9 percent, respectively. For 1,423 (Monday: 2,315) course winners at Nyse there were 1,923 (1,078) losers. 124 (107) titles were left unchanged. The technology-heavy Nasdaq came under particular pressure with the interest rate debate, because technology stocks have a high proportion of borrowed funds and are therefore particularly sensitive to speculation about interest rate hikes.
“It is surprising to me that she provided these comments. If you combine that with the statement made by Kaplan, the president of the Fed’s Dallas branch, it is time to talk about a reduction in bond purchases. Market sentiment is now that the Fed has to do something, “said portfolio manager David Wagner of Aptus Capital Advisors with a view to Yellen.
Technology stocks suffered from the interest rate debate
With the interest rate worries, the technology sector lost 3 percent, bringing up the rear. Apple typed 3.5 percent, Microsoft 1.6 percent. Alphabet and Facebook fell 1.5 and 1.37 percent, respectively.
The fact that monetary policy tightening is ultimately a sign of a strong economic recovery was shown by the order intake in US industry, which had increased in March. Economists had even hoped for something more. Imports at record levels also show that US consumers have no problems with their money. But things also went smoothly on the company side.
DuPont de Nemours was in the first quarter in terms of sales and earnings above forecasts and was now more optimistic for 2021 with higher targets. The share rose 1.6 percent. Similar to the picture at CVS Health, which responded with higher forecasts to unexpectedly strong sales and earnings figures. The share of the drugstore chain and provider of health services rose 4.4 percent to a multi-year high. Pfizer prices rose 0.3 percent. The pharmaceutical giant exceeded the earnings forecasts.
And finally, According to the figures, Under Armor had also raised its annual forecasts. But the stock turned down 1.2 percent. It has already increased by a third this year.
The fertilizer group Mosaic did better than expected in the first quarter. Investors take advantage of this good news to take profits: Mosaic fell 2 percent. The car rental company Avis presented budget in the first quarter not as badly as feared. Because of the shortage of semiconductors, Avis saw the renewal of its vehicle fleet fraught with uncertainties. The stock fell 6.4 percent. The business figures of the semiconductor company Rambus were received positively, the share of which rose by 2 percent.
Gold burdened by interest rate debate
In the foreign exchange market, the dollar recovered from its recent losses. The dollar index rose 0.4 percent – also supported by rate hike fantasies. The market was expecting strong data this week, especially on the labor market in April.
The yields on government bonds turned into the red, the ten-year bonds are yielding 1.8 basis points lower at 1.59 percent. The quotes were propped up by geopolitical tensions in China.
The prospect of rising interest rates soon weighed on the gold price. The firm greenback also depressed. On the oil market, the concentration on the economic recovery prevailed, so prices rose – to the highest settlement prices since March 11th. The resumption of many transatlantic flights also fueled oil prices.
INDEX last +/-% absolute +/-% YTD
DJIA 34,133.03 0.06 19.80 11.52
S&P 500 4,164.66 -0.67 -28.00 10.88
Nasdaq Comp. 13,633.50 -1.88 -261.62 5.78
Nasdaq-100 13,544.67 -1.85 -255.05 5.09
Term of return Bp to VT Return VT +/- Bp YTD
2 years 0.16 -0.4 0.16 3.9
5 years 0.81 -1.0 0.82 45.3
7 years 1.26 -2.0 1.28 61.5
10 years 1.59 -1.7 1.60 67.0
30 years 2.25 -2.9 2.28 60.5
Forex last +/-% Tue, 8:33 a.m. Mon, 6:21 p.m.% YTD
EUR / USD 1.2018 -0.38% 1.2039 1.2055 -1.6%
EUR / JPY 131.34 -0.18% 131.60 131.51 + 4.2%
EUR / CHF 1.0975 -0.12% 1.1006 1.0995 + 1.5%
EUR / GBP 0.8650 -0.25% 0.8673 0.8669 -3.1%
USD / JPY 109.28 + 0.20% 109.35 109.10 + 5.8%
GBP / USD 1.3894 -0.13% 1.3876 1.3907 + 1.7%
USD / CNH (offshore) 6.4837 + 0.20% 6.4792 6.4742 -0.3%
BTC / USD 54,668.76 -4.27% 56,065.26 57,581.76 + 88.2%
ROHL last VT-Settl. +/-% +/- USD% YTD
WTI / Nymex 65.76 64.49 + 2.0% 1.27 + 35.2%
Brent / ICE 68.93 67.56 + 2.0% 1.37 + 34.1%
METALS last previous day +/-% +/- USD% YTD
Gold (spot) 1,779.30 1,792.20 -0.7% -12.90 -6.3%
Silver (spot) 26.48 26.88 -1.5% -0.39 + 0.3%
Platinum (spot) 1,237.63 1,236.03 + 0.1% +1.60 + 15.6%
Copper future 4.55 4.54 + 0.2% + 0.01 + 29.1%
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DJG / DJN / flf
(END) Dow Jones Newswires
May 04, 2021 4:21 PM ET (8:21 PM GMT)