Futures on the S&P 500 and Dow Jones Industrial Average fell 0.9% on the Thursday before the call.
Shares in Europe and Asia fell sharply after US markets fell.
The German DAX fell 1.6% at noon, while the CAC 40 in Paris fell 1.7% and the British FTSE 100 fell 2.1%.
On Wednesday, the Dow fell more than 1,100 points, or 3.6%. The S&P 500 index fell 4% and the high-tech Nasdaq fell 4.7%.
Now the benchmark index has fallen more than 18% from the record high it reached earlier this year. It’s just ashamed of the 20% reduction that is considered a bear market.
“Market sentiment is very negative, as traders and investors are largely concerned about the economic downturn and rapid inflation,” said Naim Aslam of Avatrade.
Rising interest rates, high inflation, the war in Ukraine and the slowdown in China’s economy have forced investors to reconsider the prices they are willing to pay for a wide range of stocks, from high-tech companies to traditional automakers.
The last bear market took place just two years ago, but it will still be the first for those investors who started trading from their phones during the pandemic. For years, thanks in large part to the extraordinary actions of the Federal Reserve, stocks often seemed to go in only one direction: up. Now the familiar call to “buy the fall” after each market fluctuation gives way to the fear that the fall will turn into a crater.
The Federal Reserve is trying to mitigate the impact of the highest inflation in four decades by raising interest rates. Many other central banks are on a similar path. But the Bank of Japan is pursuing its policy of low interest rates, and the gap between the benchmark rates of the world’s largest and third largest economies has pushed the dollar’s value against the Japanese yen.
Japan reported a trade deficit in April as its imports rose 28%. The shift reflects rising energy spending amid the war in Ukraine and a weakening yen against the US dollar.
The Nikkei 225 in Tokyo lost 1.9% to 26,402.84, while Hang Seng in Hong Kong fell 2.5% to 20,120.60. In South Korea, Kospi was down 1.3% to 2,592.34, while Australia’s S&P / ASX 200 was down 1.7% to 7,064.50.
The Shanghai Composite Index reversed previous losses, rising 0.4% to 3,096.96.
On Wednesday, retailer Target lost a quarter of its value after reporting earnings that were largely inconsistent with analysts ’forecasts. Inflation, especially shipping costs, pulled the operating margin for the first quarter to 5.3%. He expected 8% and above.
The company has warned that its freight costs this year will be $ 1 billion higher than it expected just three months ago.
The report came a day after Walmart said its profits had suffered from higher costs. The country’s largest retailer was down 6.8%, adding losses from Tuesday.
Target and Walmart provided strong evidence that inflation is affecting consumers, saying they refrained from buying goods with big tickets and switched from national brands to less expensive store brands.
Weak reports have raised concerns that persistently rising inflation is putting more pressure on a wide range of businesses and could cut their profits more deeply.
Other major retailers also suffered significant losses.
The data do not quite match. On Tuesday, the market received an encouraging report from the Department of Commerce, which showed an increase in retail sales in April, driven by rising sales of cars, electronics and increased restaurant costs.
Investors are worried that the Fed could cause a recession if it raises interest rates too high or too fast. Remaining concerned about global growth as Russia’s invasion of Ukraine puts even more pressure on oil and food prices, and blockades in China to stop COVID-19 cases exacerbate supply chain problems.
In other electronic trading on the New York Mercantile Exchange, U.S. benchmark oil fell $ 1.27 to $ 108.32 a barrel. On Wednesday, it fell $ 2.81 to $ 109.59.
Brent crude oil, which is the basis of pricing in international trade, fell 71 cents to $ 108.40 a barrel.
The dollar fell to 127.92 Japanese yen from 128.20 yen on Wednesday at the end of Wednesday. The euro strengthened to $ 1.0514 from $ 1.0464.
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