Stocks in Wall Street closed lower on Tuesday, marking a temporary pause in a five-week rally that pushed the market to its highest level since last year. The S&P 500 dropped by 0.5% (20.88 points) to 4,388.71, while the Dow Jones Industrial Average fell by 0.7% (245.25 points) to 34,053.87. The Nasdaq composite also declined by 0.2% (22.28 points) to 13,667.29. The market’s retreat can be attributed to concerns about a potential recession and the possibility of continued interest rate hikes by the Federal Reserve. Critics suggest that maintaining higher rates for a longer period could negatively impact the economy.
The global economy’s weakness had an adverse effect on crude oil prices and stocks of energy companies. Energy stocks experienced the largest loss among the 11 sectors that constitute the S&P 500, dropping by 2.3%. However, Dice Therapeutics witnessed a significant surge of 37.2% after the biopharmaceutical company announced a cash acquisition by Eli Lilly for $2.4 billion. Another positive development came from the US housing market, as homebuilders in the S&P 500 recorded substantial gains. A report revealed that the number of housing projects exceeded economists’ expectations, while building permits for future activities also increased faster than anticipated.
Meanwhile, China’s recovery from the relaxation of COVID-19 restrictions faced hurdles, resulting in a stumble for the world’s second-largest economy. Hong Kong stocks declined by 1.5% following the central bank’s interest rate cut, which fell short of some investors’ expectations. Alibaba Group, one of China’s major corporations, also experienced a drop in its stock trading in the US after implementing changes in its top management and announcing a new CEO. These developments occurred after a meeting between Chinese leader Xi Jinping and US Secretary of State Antony Blinken, where no progress was made on contentious issues such as Taiwan, human rights, and technology.
(Source: AP)
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