Band Shreyashi Sanyal and Amruta Khandekar
June 30 (Reuters) – US stocks fell on Thursday, setting the Dow Jones for its worst first half since 1962, fearing that a stubborn pursuit by central banks to control inflation could hamper global economic growth.
Fears about slowing growth and soaring prices have rippled through markets, with recession worries taking center stage as monetary policymakers around the world seek to aggressively raise interest rates. borrowing costs.
Federal Reserve Chairman Jerome Powell vowed on Wednesday not to let the U.S. economy slide into a “higher inflation regime,” even if that means raising interest rates to levels that put growth in danger.
The Nasdaq High Tech Composite .IXIC came off session lows but was still poised for its biggest ever first-half declines, while the benchmark S&P 500 .SPX followed its biggest percentage decline from January to June since 1970.
The three major indexes are on track to post their second straight quarterly decline for the first time since 2015.
Fed policymakers in recent days set expectations for a second interest rate hike of 75 basis points in July, even as economic data painted a bleak picture for the US consumer.
“Until inflation comes back significantly, which at this point I think will take months, it will be difficult for the market to really find a bottom and start a recovery,” he said. Ross Mayfield, investment strategy analyst at Baird.
Meanwhile, consumer spending, which accounts for more than two-thirds of U.S. economic activity, rose less than expected in May, pointing to a tentative rebound in growth in the second quarter, while inflation maintained its trend. on the rise. [nL1N2YH162]
“A lot of investors were expecting the inflation data to really start to go down. But what we’re seeing is that it’s a lot harder, and the inflation data is staying higher longer. a long time and probably haven’t peaked,” said Sam Stovall. , chief investment strategist at CFRA.
Large-cap growth stocks, including Microsoft Corp MSFT.OApple Inc. AAPL.OAmazon.com Inc. AMZN.O and Tesla Inc. TSLA.O fell between 0.5% and 2%, driving declines for the day.
As of 12:01 a.m. ET, the Dow Jones Industrial Average .DJI was down 224.38 points, or 0.72%, at 30,804.93, the S&P 500 .SPX was down 22.26 points, or 0.58%, at 3,796.57 and the Nasdaq Composite .IXIC was down 90.17 points, or 0.81%, at 11,087.72.
Heading into the second half of the year, battered markets will continue to focus on inflation, unemployment and interest rate hikes and their impact on corporate earnings.
“There’s a feeling that earnings are going to be the next shoe to drop and earnings downgrades will catalyze another leg lower in the market,” Baird’s Mayfield said.
Walgreens Boots Alliance Inc. WBA.O fell 4.5% as the drugstore chain maintained its full-year profit forecast due to lower COVID vaccinations.
Falling issues outnumbered advances by a 1.87-to-1 ratio on the NYSE and by a 1.79-to-1 ratio on the Nasdaq.
The S&P index recorded a new 52-week high and 42 new lows, while the Nasdaq recorded 11 new highs and 332 new lows.
S&P 500 poised for worst June performance since 2008https://tmsnrt.rs/3RbYDNJ
(Reporting by Shreyashi Sanyal and Amruta Khandekar in Bengaluru; Additional reporting by Medha Singh; Editing by Arun Koyyur)
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.