[New York Stock Market] "Hurricane Approaching" Economic Concerns Lead to Decline... Nasdaq Down 0.72%

[Image source=Reuters Yonhap News]

[Asia Economy New York=Special Correspondent Joselgina] Major indices on the U.S. New York Stock Exchange closed lower on the 1st (local time) amid concerns over economic soundness. Jamie Dimon, CEO of JP Morgan, warned that a hurricane is coming to the U.S. economy, saying "Prepare yourselves."

On the day at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 32,813.23, down 176.89 points (0.54%) from the previous session. The S&P 500, centered on large-cap stocks, fell 30.92 points (0.75%) to 4,101.23, and the tech-heavy Nasdaq dropped 86.93 points (0.72%) to 11,994.46.

By sector, financial stocks showed a downward trend. Goldman Sachs and JP Morgan Chase each fell more than 1% compared to the previous session. Materials stocks linked to the economic cycle were also weak. Albemarle slid 7.8%, and Mosaic dropped 6.1%. Norwegian Cruise Line and United Airlines also fell around 4.50% each. On the other hand, Salesforce surged nearly 10% after its first-quarter earnings exceeded market expectations.

Investors continued to express concerns about the U.S. economy. CEO Dimon warned that a hurricane is coming to the U.S. economy, citing the Federal Reserve's (Fed) quantitative tightening and the impact of the Ukraine war as risk factors. Starting today, the Fed begins its balance sheet reduction process known as quantitative tightening. The Fed plans to reduce Treasury bonds and mortgage-backed securities (MBS) by $47.5 billion per month initially, increasing to $95 billion per month over the next three months.

In the economic report "Beige Book" released by the Fed on the same day, it was stated that the economy in most U.S. regions recently grew at a "modest or moderate pace." In particular, "four districts reported slower growth compared to the previous survey period," confirming a slowdown in some areas.

However, despite concerns about economic slowdown, the Fed is expected to continue raising interest rates for the time being. Mary Daly, President of the San Francisco Fed, also emphasized in a CNBC interview that "the Fed will do what is necessary to bring inflation down to the required level," adding, "The Fed’s job is to remove monetary easing measures." She stated that the benchmark interest rate should reach a neutral rate by the end of the year and supported a 0.5 percentage point rate hike at least through June and July.

James Bullard, President of the St. Louis Fed and a prominent hawkish figure favoring monetary tightening, also reinforced tightening in a speech at the Memphis Economic Club, saying, "We are at risk of losing control over inflation expectations." Earlier, U.S. Treasury Secretary Janet Yellen admitted in an interview with CNN that past judgments on inflation were incorrect.

In the New York bond market, the 10-year Treasury yield rose to the 2.9% range. The U.S. dollar strengthened. The Dollar Index, which shows the value of the dollar against six major currencies, rose 0.77% compared to the previous session.

U.S. economic indicators released on the day showed mixed results. The final May manufacturing Purchasing Managers' Index (PMI) compiled by S&P Global recorded 57.0, the lowest in four months, below market expectations. Meanwhile, the May manufacturing PMI released by ISM was 56.1, exceeding market expectations.

Oil prices rose due to Shanghai lifting its city lockdown from the 1st and the European Union's partial restrictions on Russian crude oil imports. On the New York Mercantile Exchange, July West Texas Intermediate (WTI) crude oil closed at $115.26 per barrel, up 59 cents (0.51%) from the previous session.

This content was produced with the assistance of AI translation services.