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US stocks fall and extend sales




US stock indices rose early Tuesday, before falling back into negative territory, after three days of sharp declines.

The S&P 500 was recently down 0.5% in morning trading, a day after the broad index fell 3.2% to its lowest level for the year. The technology-heavy Nasdaq Composite fell 0.4% while the Dow Jones Industrial Average fell around 0.5%. All three indices withdrew during the morning after rising at least 1.6% early.

The yield on the benchmark index for 10-year government bonds fell to 2.958% on Tuesday from 3.080% on Monday.

A cocktail of geopolitical risk and economic headwinds poses the biggest threat to global growth in many years and rattling markets. In the US, rising inflation has caused the Federal Reserve to start raising interest rates, and investors fear that this could tip the economy into recession.

Global markets look just as troubled. In China, recurring Covid-1[ads1]9 outbreaks and Beijing’s rigorous approach to combating them threaten to revive the supply chain bottlenecks that first led to higher inflation. In Europe, the war in Ukraine threatens to keep energy prices high and weigh on the region’s growth.

Early Tuesday, some investors picked up stocks that had been hit by the headwind.

“Everyone is looking at this moment to see if we have reached the bottom,” said Quincy Krosby, Chief Equality Strategist for LPL Financial. “The instincts are that we have not reached the bottom yet.”

Investors also looked forward to Wednesday’s report on recent consumer price index data, which is expected to show that inflation rose at a slower pace in April than last month, Krosby said.

Shares may turn the price later as some investors look to sell their shares during a break in the downturn, Krosby said. It is also possible for the sentiment to screw up a penny, she added. In January 2019, a speech by Fed Chairman Jerome Powell signaled that the central bank would be patient with interest rate increases – and reverse a steep market sale.

“This is still a trading market,” she warned.

Federal Reserve Bank of New York President John Williams said on Tuesday that he believes the Fed can achieve a “soft landing” for the US economy while raising interest rates, although unemployment may rise.

“By 2023, it is very likely that you will see growth slow down very significantly, and the range of recessions is really starting to wane,” said Seema Shah, chief strategist at Principal Global Investors..

“What we see is the recognition that it’s going to be very tough for the Fed to get the soft landing right. It’s not impossible, but it’s going to be a very difficult balancing act.”

Tuesday’s early rise was not likely to change the downward path to the market, Shah said. Investors welcomed signs that the conflict in Ukraine did not escalate and a planned EU embargo on Russian oil could face delays, she said.

Peloton Interactive fell 11% after reporting declining sales and increasing losses as the stationary bike manufacturer struggles with the decline in prepandemic consumer habits.

Biohaven Pharmaceutical Holding Co.

increased by more than 70% after Pfizer said it would buy the rest of the company for around $ 11.6 billion. AMC Entertainment Holdings rose more than 8% after reporting a sharp jump in sales in the first quarter.

Brent crude fell 0.3 percent to $ 105.59 a barrel. Oil prices had risen in recent months, but concerns that China’s shutdowns will suppress demand for raw materials have taken some of the rally down.

Demand for oil in China is likely to pick up again as restrictions begin to ease, although the EU’s proposed ban on Russian oil imports is still an overhang, said Daniel Hynes, a senior commodity strategist at ANZ in Sydney.

“The basics are still very slanted towards an extremely tight market, with the risk of a further decline in supply over the next three to six months,” said Mr. Hynes.

Bitcoin prices rose after a steep sale. The world’s largest cryptocurrency traded at $ 31,854.30 on Tuesday, according to CoinDesk. It was up from kl. 17.00 ONE MONDAY when it stood at $ 31,075.70.

Asian stock quotes were mixed on Tuesday.


Photo:

Kin Cheung / Associated Press

Abroad, the pan-continental Stoxx Europe 600 rose 1.5%. In Asia, Japan’s Nikkei 225 closed 0.6% lower, Shanghai Composite rose 1.1% and Hong Kong’s Hang Seng index fell 1.8%.

Swedish Match jumped more than 25% after confirming that the tobacco company Philip Morris International was in talks to buy it.

“I expect short-term market volatility to persist in Asia, as markets address persistent supply chain challenges, the likelihood of higher inflation and the prospect of more restrictive global central bank policies,” said Matt Doody, a study in emerging markets. analyst at Janus Henderson Investors’ global research team.

Janus Henderson’s emerging market fund has tipped the portfolio away from long-term growth stocks due to the risk of higher interest rates, Doody said. Duration is a measure of how sensitive the prices of bonds or other financial investments are to changes in interest rates, given the timing of future expected cash flows. Fast-growing technology stocks, which are largely valued based on far-reaching profits, are assets with a longer duration than stocks in mature companies.

– Justin Baer contributed to this article.

Write to Will Horner at william.horner@wsj.com and Dave Sebastian at dave.sebastian@wsj.com

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