NEW YORK, New York - There was a major bust on Wall Street on Tuesday as investors continued to fret over the prospect of longer term interest rate highs. The 10-year Treasury note on Tuesday was hovering around 16-year highs, an indication bond investors see rates remaining high for longer.
"The market is still trying to digest the potential for where that 10-year rate is going to finish," Jack Janasiewicz, portfolio manager at Natixis told Reuters Tuesday. "Until we get more clarity on where the 10-year settles, then the equity market is going to be pretty nervous."
On the economic front, new home sales last month came in lower than expected. Transactions were recorded at 675,000 for August, the U.S. Commerce Department reported Tuesday. The number was 8.7 percent below that recorded in July, and was below the expected number of 695,000.
Separately, the Conference Board Consumer Confidence Index dropped sharply to 103, a major dip from the 108.7 registered in August, the Conference Board said in a statement published on Tuesday. A figure of 105.5 was the expectation.
S&P 500 The S&P 500, a benchmark index for the U.S. stock market, experienced a sharp downturn on Tuesday. It closed at 4,273.53, down 63.91 points, representing a decrease of 1.47 percent. Concerns about inflation and potential interest rate hikes weighed on market sentiment.
Dow Jones Industrial Average The Dow Jones Industrial Average faced a similar fate, closing at 33,618.88. It recorded a loss of 388.00 points, equivalent to a decline of 1.14 percent. This decline was driven by the mix of economic data and geopolitical uncertainties, leaving investors cautious.
NASDAQ Composite The NASDAQ Composite, which often reflects the performance of tech-related stocks, had a challenging day. It closed at 13,063.61, shedding 207.71 points, or 1.57 percent. Concerns about the outlook for tech companies and rising interest rates played a role in the downward movement.
Continuing Robust Interest Rates Keep U.S. Dollar Well Bid
In the ever-fluctuating world of foreign exchange markets, Tuesday saw notable gains in the U.S. dollar as traders closely monitored the sustaining nature of heigthened interest rates. Here's a breakdown of the latest quotes:
EUR/USD (Euro/US Dollar)
The Euro to U.S. dollar exchange rate, EUR/USD, was at 1.0570 in late U.S. trading, reflecting a decrease of 0.0023, or -0.22 percent. This dip in the Euro's value against the dollar drew the attention of investors as they assessed market dynamics, particularly in relation to interest rate markets.
"You are talking about a dollar that's been super strong now for almost two months, plus you have risk appetite rolling over," Michael Goshko, senior market analyst at Convera Canada ULC told Reuters Tuesday.
USD/JPY (US Dollar/Japanese Yen)
The Japanese yen, USD/JPY, weakened to 149.036 showing a modest dip of 0.15, or -0.10 percent. This shift indicated a slight strengthening of greenback against the Japanese yen, prompting traders to adjust their positions accordingly.
USD/CAD (US Dollar/Canadian Dollar)
The Canadian dollar exchange rate, USD/CAD, dropped 0.0066, equivalent to -0.49 percent, placing it at 1.3519, an 8-day low. The Canadian dollar faced headwinds as the U.S. dollar gained ground, catching the eye of market participants. "The Canadian dollar was not going to be able to swim against the tide of a stronger U.S. dollar for very long," Goshko said.
GBP/USD (British Pound/US Dollar)
The British pound found itself at 1.2158 in late trading Tuesday, down by 0.0052, or -0.43 percent. This drop in the pound's value against the Dollar stirred conversations among forex traders, who assessed the implications of this shift.
USD/CHF (US Dollar/Swiss Franc)
The Swiss Franc, USD/CHF, retreated 0.0034, or -0.37 percent, reaching 0.9153.
AUD/USD (Australian Dollar/US Dollar)
The Australian dollar settled around 0.6394 after piercing the 0.6400 barrier, experiencing a decrease of 0.0028, or -0.44 percent. The Australian dollar faced some headwinds due to overall dollar strength and weakening commodity prices.
NZD/USD (New Zealand Dollar/US Dollar)
The New Zealand dollar slid to 0.5943, down by 0.0022, or -0.38 percent.
Significant Declines on Most Global Stock Markets Tuesday
In the ever-fluctuating world of finance, global stock markets showcased a seriously negative tone Tuesday with most bourses retreating. With those that advanced, the gains were minor.
Here's a roundup of key stock market quotes for the day:
S&P/TSX Composite Index North of the border, the S&P/TSX Composite index closed at 19,556.15, down 244.46 points, representing a decrease of 1.23 percent. Canadian investors were influenced by the broader market trends, with declining oil prices also affecting energy-related stocks.
FTSE 100 (UK): The FTSE 100 index displayed a modest gain of 1.73 points, representing an increase of 0.02 percent, closing at 7,625.72.
DAX PERFORMANCE-INDEX (Germany): Germany's DAX PERFORMANCE-INDEX faced a decline of 149.62 points, equivalent to a 0.97 percent drop, settling at 15,255.87.
CAC 40 (France): France's CAC 40 experienced a decrease of 49.86 points Tuesday, marking a decline of 0.70 percent, finishing the day at 7,074.02.
ESTX 50 PR.EUR (Eurozone): The ESTX 50 PR.EUR index in the Eurozone decreased by 38.19 points, a decline of 0.92 percent.
Euronext 100 Index (Eurozone): The Euronext 100 Index faced a dip of 9.94 points, reflecting a decrease of 0.75 percent.
BEL 20 (Belgium): Belgium's BEL 20 index displayed a decline of 40.98 points Tuesday, equivalent to a 1.14 percent drop.
MOEX Russia Index (Russia): The MOEX Russia Index experienced a slight decline of 4.14 points, or 0.19 percent.
Nikkei 225 (Japan): Japan's Nikkei 225 saw a significant dip, plummeting by 363.57 points, or 1.11 percent, to conclude at 32,315.05.
HANG SENG INDEX (Hong Kong): Hong Kong's HANG SENG INDEX had a challenging day Tuesday, shedding 262.39 points, a decrease of 1.48 percent, to close at 17,466.90.
SSE Composite Index (China): The SSE Composite Index in China recorded a drop of 13.33 points, marking a decline of 0.43 percent, with a trading volume of 789.595 million shares.
Shenzhen Index (China): China's Shenzhen Index displayed a decrease of 60.47 points, equating to a 0.60 percent drop, with a substantial trading volume of 3.235 billion shares.
S&P/ASX 200 (Australia): The S&P/ASX 200 index in Australia experienced a decrease of 38.30 points, representing a 0.54 percent decline, closing the day at 7,038.20.
ALL ORDINARIES (Australia): Australia's ALL ORDINARIES index faced a decrease of 40.30 points Tuesday, marking a 0.55 percent drop.
S&P/NZX 50 INDEX GROSS (New Zealand): New Zealand's S&P/NZX 50 INDEX GROSS experienced a drop of 34.25 points, reflecting a decline of 0.30 percent.
STI Index (Singapore): Singapore's STI Index showed minimal movement, with a minor drop of 0.33 points, or 0.01 percent.
S&P BSE SENSEX (India): India's S&P BSE SENSEX exhibited a marginal decrease of 78.22 points, representing a 0.12 percent drop.
NIFTY 50 (India): India's NIFTY 50 index showed a marginal decrease of 9.85 points, equivalent to a 0.05 percent drop.
IDX COMPOSITE (Indonesia): Indonesia's IDX COMPOSITE index recorded a drop of 74.58 points, or 1.07 percent.
FTSE Bursa Malaysia KLCI (Malaysia): Malaysia's FTSE Bursa Malaysia KLCI index showed a minor gain of 2.10 points Tuesday, equivalent to a 0.15 percent increase.
KOSPI Composite Index (South Korea): South Korea's KOSPI Composite Index saw a significant decrease of 32.79 points, or 1.31 percent.
TSEC weighted index (Taiwan): Taiwan's TSEC weighted index faced a dip of 176.16 points, marking a 1.07 percent decline.
Top 40 USD Net TRI Index (South Africa): South Africa's Top 40 USD Net TRI Index took a substantial hit, falling by 101.23 points, or 2.61 percent, during the day.
TA-125 (Israel): Israel's TA-125 index exhibited a decrease of 20.91 points Tuesday, equivalent to a 1.11 percent drop.
EGX 30 Price Return Index (Egypt): Egypt's EGX 30 Price Return Index displayed a gain of 34.30 points, representing a 0.17 percent increase, with a trading volume of 209.814 million.
Market analysts attribute Tuesday's downturn to a combination of factors, including economic data releases, ongoing global trade tensions, and geopolitical developments.