US stocks mixed as week starts quietly – Zimbabwe Post

NEW YORK — U.S. stocks closed mixed on Monday as global markets stabilized after a week of wild volatility.

The S&P 500 was essentially flat, having seen small gains and losses throughout the day, and was last up slightly less than 0.01%. The Dow Jones Industrial Average fell 140 points, or 0.4%, while the Nasdaq Composite edged up 0.2%.

Markets in Europe and Asia were also relatively calm, a notable turnaround from last week’s volatility, when Japanese stocks had their worst day since the Black Monday crash in 1987, while U.S. stocks had their best day of 2022.

One of the key factors calming the market was the yen’s fall on Monday after the currency surged following the Bank of Japan’s recent rate hike, forcing many hedge funds and investors to unwind a popular trade that allows them to borrow yen at low rates and invest elsewhere. The sudden sell-off in the yen set off a chain reaction in global markets.

A statement last week from a senior Bank of Japan official assuring that interest rates would not rise further as long as markets remained “volatile” helped stabilize the situation. However, other concerns, particularly around a slowing U.S. economy, also added to market turmoil last week.

Looking ahead, this week will see the release of important economic reports on inflation and consumer spending. Wall Street is hoping that the data will show a continued slowdown in inflation coupled with strong retail sales. Such results would suggest that the Federal Reserve’s strategy of curbing inflation without triggering a recession through rate hikes is working.

However, weaker-than-expected economic data recently has raised concerns that the Fed may be hitting the brakes too hard. Earlier this month, a report showing a sharper-than-expected slowdown in U.S. hiring heightened concerns that the economy could be headed for a downturn.

Bank of America strategists led by Ohsung Kwon warned that unexpectedly high inflation data could shock markets and could trigger a massive sell-off. The Fed faces a delicate balancing act: lowering interest rates could boost the economy but risk fueling inflation, while keeping rates high could curb inflation but hurt growth.

Despite these challenges, the U.S. economy continues to grow, and many economists believe a recession is unlikely. However, concerns still weighed on Treasury yields, which fell again on Monday ahead of the upcoming data. The 10-year Treasury yield fell to 3.90% from 3.94% on Friday, while the two-year Treasury yield, which is more sensitive to the Fed’s actions, fell to 4.01% from 4.06%.

Most stocks on Wall Street fell, but a 4.1% rise in Nvidia shares helped offset some of the losses. Nvidia’s performance was particularly impactful because of its huge market value and the fact that the company is a key player in the recent surge in interest in artificial intelligence technology.

Other stocks to watch included KeyCorp, which gained 9.1% after announcing a $2.8 billion investment from Scotiabank. The funding is expected to support further growth in KeyCorp’s investment bank and wealth management divisions.

Conversely, Hawaiian Electric Co. tumbled 14.5% after reporting weaker-than-expected spring results and casting doubt on its ability to continue operating without access to financing to repay $1.71 billion in debt related to storms and wildfires on Maui.

As of the close, the S&P 500 rose slightly by 0.23 points to 5,344.39; the Dow Jones Industrial Average fell 140.53 points to 39,357.01; and the Nasdaq Composite Index rose 35.31 points to 16,780.61.

Looking ahead, investors will be closely watching earnings reports from major companies such as Walmart and Home Depot later this week. While most of the largest U.S. companies reported better-than-expected spring profits, there are growing concerns about how low-income consumers are coping with economic pressures.

Source: Reuters

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