Live stock news: Stocks surge as recession warning mounts, Uber and Lyft react to gig worker offer, Amazon’s Prime Day

Symbol Price Change %Change
Me: DJI $29,202.88 -93.91 -0.32
SP500 $3,612.39 -27.27 -0.75
I: COMP $10,542.10 -,110.30 -1.04

U.S. stocks fell early Tuesday morning as investors voiced concerns that the Federal Reserve may tighten interest rates and make borrowing more difficult.

Stocks fell on Monday as concerns about Federal Reserve tightening, an escalation in the Ukraine war and China-trade policy continued to roil markets.

The S&P 500 closed down 27.27 points, or 0.7%, at 3,612.39 after opening slightly higher. The Dow Jones Industrial Average fell 93.91 points, or 0.3%, to 29,202.88, while the Nasdaq Composite lost 110.30 points, or 1%, to 10,542.10. This is the lowest closing value for the tech-heavy Nasdaq since July 2020, according to Dow Jones Market Data.

Shares of chipmakers suffered losses stemming from new restrictions on semiconductor exports by the Biden administration aimed at deterring China’s military.

The PHLX Semiconductor Sector fell 3.5% on Monday to its lowest close since November 2020. These losses also contributed to reduced inventories for enterprises, which are major chip users.

“New restrictions on Chinese semiconductor sales are a big reason we’re seeing a bearish trend in these stocks,” said Randy Frederick, managing director of trading and derivatives at the Schwab Center for Financial Research.

Technology stocks make up about a quarter of the S&P 500, Mr. Frederick noted. Chipmaker Qualcomm fell $6.31, or 5.2%, to $114.60 on Monday, while Broadcom fell $22.78, or 5%, to $437.70. Technology was the worst performer among the S&P 500’s 11 sectors, down 1.6%.

Shifting expectations for more rate hikes from the Fed have been the main reason for recent stock moves.

Friday’s jobs report showed the labor market remained tight as the unemployment rate fell to a half-century low, fueling concerns that the Fed may tighten monetary conditions more aggressively.

Hopes of a “Fed pivot” in which the central bank would halt interest rate hikes and boost stocks have largely been dashed.

Traders now expect the Fed’s more aggressive federal funds rate to reach 4.7% in the second quarter of 2023, according to derivative data from FactSet.

“Inflation is still high and the labor market is hot — there’s nothing to suggest the Fed will be dovish or hawkish for at least a few months,” said Michael Antonelli, market strategist at Baird. Investors await the release of the next U.S. inflation data on Thursday as another key indicator of where monetary policy may be heading.

Fahad Kamal, chief investment officer at Kleinwort Hambros, said: “Markets are still in a tailspin. The US labor market is still incredibly strong and the Fed has one mandate right now: inflation.” “The most important number in the world right now” is the looming inflation number, he said.

Meanwhile, Asian shares were mostly lower on Tuesday as losses in technology-related stocks weighed on global indices.

Taiwan fell 4.4% after reopening after a holiday in the first trading session since the US imposed new restrictions on exports of semiconductors and chip-making equipment to China. TMSC, the world’s largest chipmaker, fell 8.3%.

Japan’s Nikkei 225 index fell 2.6% to 26,401.25. South Korea’s Kospi index lost 1.8% to 2,192.07. Both markets reopened after the holiday on Monday. Hong Kong’s Hang Seng fell 2.2% to 16,830.73. The Shanghai Composite rose 0.2% to 2,979.79, while Australia’s S&P/ASX 200 index fell 0.3% to 6,645.00.

“The Japanese and South Korean markets are offsetting earlier global market losses as their exposure to the tech sector spurred more selling, as reflected on Wall Street,” Yeap Jun Rong, market strategist at IG in Singapore, said in a report.

In a bit of encouraging news, Japan reopened to generally unrestricted tourism on Tuesday after more than two years of COVID-19 restrictions. Expected travel spending could help lift the world’s third-largest economy as it grapples with slowing global growth and inflation.

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