LAST UPDATE: 20:04
The buying mood on Wall Street lasted less than an hour, with key indices losing their gains and returning to negative ground after the announcement of the latest data on the US labor market, which brought back to the fore the fear of persistent inflation.
On the board, the Dow Jones industrial average, which started with a rise of 0.8%, now loses 349.38 points or 1.06% and stands at 32,640.74 points, while the broader S&P 500 from + 0.8% returned to -1.16%, sliding to 4.84.05 points. The same picture applies to the technology Nasdaq, which although started with a rise of 1.2% or almost 150 points, now falls by 1.14% to 11,944.14 points.
The reason for the change in the market image was the data on the labor market in the USA, which showed that the vacancies remained close to their historical highs in April as well. In particular, according to data released by the US Department of Labor, the vacancies amounted to 11.4 million in April, which shows that companies are still struggling to meet their labor needs, which leads them to increase their wages and consequently prices, perpetuating inflationary pressures.
A development that raises fears that it will force the Federal Reserve to intensify the aggressive tightening of its monetary policy, fueling fears that it could thus lead the US economy into recession.
These concerns were not allayed by the unexpected improvement in manufacturing activity in the United States in May. The Institute for Supply Management (ISM) said the U.S. factory activity index rose to 56.1 points last month from 55.4 points in April. An indication of more than 50 points indicates an expansion of manufacturing, which accounts for 12% of the US economy.
Economists polled by Reuters forecast a decline of 54.5 points.
At the same time, the continuing rise in oil prices is worrying, with US crude rising 2.51% to $ 117.55 a barrel and Brent adding 2.42% to $ 118.40, in the wake of some European Union embargo on Russian oil as part of sanctions against Russia’s invasion of Ukraine.
Investors are also awaiting the release of the Fed’s latest Beige Book report, also known as the Beige Bible, in order to get a better picture of economic conditions and the US economy.
Source: Capital
I am Sophia william, author of World Stock Market. I have a degree in journalism from the University of Missouri and I have worked as a reporter for several news websites. I have a passion for writing and informing people about the latest news and events happening in the world. I strive to be accurate and unbiased in my reporting, and I hope to provide readers with valuable information that they can use to make informed decisions.
