Wall Street plunges as Treasuries fall, oil prices fall

NEW YORK, May 10 (Reuters) – Shares on Wall Street fell in a volatile session and oil prices fell on Tuesday as risk appetite appeared to wane as investors turned to safe havens such as Treasuries amid fears over inflation and slowing economic growth.

U.S. Treasuries rallied, with the yield on the benchmark 10-year note falling from a more than three-year high to below 3% as the market reassessed the outlook for inflation a day before the data release. the US consumer price index (CPI).

Markets have been volatile on rampant inflation and fears that monetary tightening aimed at slowing price increases could also lead to slower economic growth.

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Last week, central banks in the United States, Britain and Australia raised interest rates and investors braced for further tightening as policymakers battle soaring inflation.

As all three US indices rebounded from Monday’s selloff, enthusiasm for stocks quickly faded.

“There’s a ton of cross-currents going on right now. Liquidity is drying up and volatility is the name of the game,” said Matthew Miskin, co-head of investment strategy at John Hancock Investment Management in Boston.

“The tech and growth side of the (equity) market is such a big drag. Treasury yields have been rising as fast as they’ve spooked risk assets. If they could take a break here, it could help to the market… to find a seat.”

Miskin was reassured by official comments from the Federal Reserve on Tuesday that suggested efforts to stage a soft landing. In particular, he pointed to Cleveland Federal Reserve Bank Chair Loretta Mester’s comment that while unemployment may rise and growth slow, Fed policy tightening should not push the economy forward. in a “lasting slowdown”. Read more

“They’ve been so hawkish that the market wants to sniff it out at any little move,” Miskin said. “When it comes to sentiment, a lot of people are looking for surrender. The dots aren’t fully connected for that yet.”

As of 11:30 a.m. EDT (1530 GMT), the Dow Jones Industrial Average (.DJI) fell 97.45 points, or 0.3%, to 32,148.25, the S&P 500 (.SPX) lost 10.91 points, or 0.27%, to 3,980.33 and the Nasdaq Composite (.IXIC) fell 16.49 points, or 0.14%, to 11,606.76.

The pan-European STOXX 600 index (.STOXX) rose 0.80% and the MSCI gauge of stocks across the world (.MIWD00000PUS) lost 0.33%, after previously rising 1.44%.

The U.S. dollar was choppy on Tuesday as it held near a two-decade high ahead of a key reading on inflation that could give some insight into the Fed’s policy trajectory. Read more

The dollar index rose 0.164%, with the euro falling 0.19% to $1.0535. The Japanese yen weakened 0.03% against the greenback at 130.29 to the dollar, while the pound last traded at $1.2301, down 0.24% on the day.

Earlier data showed China’s export growth slowed to its weakest level in nearly two years as the central bank pledged to step up support for a slowing economy. Read more

Oil prices fell in volatile trade as the market balanced looming European Union sanctions on Russian oil with demand concerns over China’s coronavirus lockdowns, a strong dollar and growing recession risks .

U.S. crude recently fell 1.85% to $101.18 a barrel and Brent to $103.92, down 1.91% on the day.

Benchmark 10-year notes were last up 33/32 to 2.9497%, down from 3.079% Monday night.

Spot gold fell 0.4% to $1,847.41 an ounce. US gold futures % at $1,857.10 an ounce.

Elsewhere, Bitcoin rose 4% after falling to its lowest level since July 2021. Tuesday’s gain allowed it to recoup some losses when it fell 11.8% in Monday’s plunge, which had been its largest daily decline since May 2021. Read more

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Additional reporting by Herbert Lash and Chuck Mikolajczak in New York, Elizabeth Howcroft in London; Editing by Bradley Perrett, Raissa Kasolowsky and Alexander Smith

Our standards: The Thomson Reuters Trust Principles.


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Felix J. Dixon