Nasdaq drops with dollar, oil soars profits, Fed in focus

  • US stocks fell with the Nasdaq closing lower
  • Eurozone study shows low German morale
  • The Federal Reserve is in focus with Tuesday’s two-day policy meeting

NEW YORK, July 25 (Reuters) – The Nasdaq (.IXIC) stock market closed lower on Monday after a choppy session for US stocks ahead of a big week of technology earnings reports while oil prices rose and Treasury yields rose as investors prepared for the Federal Reserve. interest rate hike.

In currencies, the dollar index, which touched a 20-year high this month, fell slightly and gold also fell. Read more

US Treasury Secretary Janet Yellen said on Sunday that while US economic growth has been slowing, a recession is not inevitable. Read more

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Treasury yields rose as investors prepared for the Federal Reserve to raise interest rates by an expected 75 basis points this week. Some worry that a recession may occur.

Investors were also ahead of earnings in big companies like Apple (AAPL.O), Microsoft (MSFT.O) and (AMZN.O), as well as second-quarter GDP data.

“Right now we’re in a wait-and-see state waiting for all of these developments to happen,” said Michael O’Rourke, chief market strategist at JonesTrading in Stamford, Connecticut.

“Maybe people are taking some risk before earnings. We’ve seen interest rates go up a bit as well, and that helps some of the valued names like banks.”

The Dow Jones Industrial Average rose 90.75 points, or 0.28%, to 31,990.04 points, the Standard & Poor’s 500 increased 5.21 points, or 0.13%, to 3,966.84 points, and the Nasdaq Composite Index declined 51.45 points, or 0.43%, to 11,782.67. Read more

Earlier, a widely watched survey showed that German business sentiment fell more than expected in July as higher energy prices and looming gas shortages push Europe’s largest economy into recession. Read more

But the pan-European STOXX 600 Index (.STOXX) ended 0.13% higher, and the MSCI gauge of worldwide stocks (.MIWD00000PUS) was up 0.01%.

German data weighed on investors’ mood in Europe along with a series of downbeat earnings and a survey over the weekend showed that some industrial companies in Germany were cutting production in response to higher energy prices. Read more

The gap between 2-year and 10-year Treasury yields US2US10 = RR, a potential signal of a looming recession when the short-term yield is above the long-end, has reversed for more than two weeks and was last at -21.5 basis points.

“This is the first meaningful reversal of the yield curve since 2006 for any period of time,” said David Petrosinelli, chief trader at InspereX, adding that this led to a generally accepted account of the slowdown to say the least.

The benchmark 10-year bond rate fell last 8/32 to 2.8105% from 2.781% late Friday while the 2-year bond rate fell 2/32 to 3.0266%, down from 2.991% in the previous session.

The dollar index fell 0.253 percent, with the euro rising 0.13 percent to $1.0223.

The Japanese yen was down 0.45% against the dollar at 136.66 per dollar, while the British pound was last traded at $1.2053, up 0.42% on the day.

Joe Manimbo, chief market analyst at Western Union, said: “Caution ahead of the Fed keeps the dollar off its highs. The market will be eager to see if the weaker data stream in any way alters the Fed’s hawkish rate trajectory.” Business Solutions in Washington DC.

“The economy continues to show fairly strong fundamental momentum, but at the same time, higher inflation, higher interest rates, they are definitely affecting the economy.”

Oil prices rose on Monday, boosted by a slight weakness in the US dollar as investors swung between supply fears and bets that higher US interest rates could dampen demand.

US crude settled up 2.11% to $96.70 a barrel and Brent crude closed at $105.15, up 1.9% on the day.

Spot gold fell 0.5% to $1,718.69 an ounce as investors positioned themselves ahead of the Fed meeting.

The price of Bitcoin was last down 2.16% to $22,108.16.

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Additional reporting by Herbert Lash and Chuck Mikolajchak in New York, Tommy Wilkes in London, Kevin Buckland in Tokyo and Lucy Raitano in London; Editing by Mark Heinrich, Margarita Choi and David Gregorio

Our Standards: Thomson Reuters Trust Principles.

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