S&P 1.34 ↓NASDAQ 1.62↓
10-year government bonds exceed 4.9%
International oil prices rise by 2%
Federal Reserve personnel: “We will stick to the 2% inflation target”
Even the mayor, who had been optimistic about the Gaza hospital explosion, was shocked. The New York stock market plummeted and government bond yields soared, reflecting geopolitical concerns. International oil prices also showed an upward trend.
On the 18th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 33,665.08, down 332.57 points (0.98%) from the previous day. The Standard & Poor’s (S&P) 500 index, centered on large-cap stocks, fell 1.34% to 4,314.60, and the Nasdaq index, centered on technology stocks, fell 1.62% and closed at 13,314.30.
U.S. President Joe Biden’s visit to Israel was considered a major watershed in curbing this war, but analysis suggests that the Gaza hospital explosion and subsequent failure to meet with Middle Eastern leaders have added to the sense of geopolitical crisis.
Also, as the United States tightened artificial intelligence (AI) semiconductor regulations, semiconductor stocks of NVIDIA (-3.96%), AMD (-2.82%), and Intel (-1.16%) continued to decline on this day.
As for international oil prices, amid concerns about the escalation of war in the Middle East, the price of West Texas Intermediate (WTI) crude oil for November contract rose 1.83% from the previous period to $88.22 per barrel, and the price of Brent crude oil for December contract recorded $91.49 per barrel, up 1.77% from the previous period.
U.S. Treasury yields recently broke the record high since 2007, with the 10-year maturity Treasury bond yield breaking through 4.9% during the day as the recent strong consumption in the US was interpreted as an upward pressure on inflation. The 30-year home equity loan (mortgage) interest rate also hit 8%, the highest level since 2000.
“Investors are highly evaluating the possibility of further interest rate hikes by the U.S. Federal Reserve,” Deutsche Bank analyst Jim Reed wrote in an investor memo. “The market is trying to figure out where interest rates will peak,” Jamie Cox, managing partner at Harris Financial, told CNBC. “They want to see what happens when we get to 5%.”
Federal Reserve officials said that they need to keep an eye on future indicators amid geopolitical uncertainty. John Williams, President of the Federal Reserve Bank of New York, said in a talk held at Queen’s College in New York that day, “We will stick to this goal to continue to achieve the 2% goal,” and “We will maintain this restrictive policy stance for the time being.” “It must be maintained,” he said. Regarding concerns about an escalation of war in the Middle East, he said, “We have to keep an eye on what’s happening around the world, and consider how we view the global economy and how that will affect the U.S. economy. We live in a global financial system and a global economy.” He added.
“I think we need to pause and wait to see how the economy evolves before deciding on the path to increase,” said Christopher Waller, a hawkish director, at an event held in London, England.
New York =
Source: Donga
Mark Jones is a world traveler and journalist for News Rebeat. With a curious mind and a love of adventure, Mark brings a unique perspective to the latest global events and provides in-depth and thought-provoking coverage of the world at large.