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U.S. Stocks Tumble Over Heightened Inflation Fears

By NAGA (Michalis Efthymiou)Stock MarketsJul 11, 2022 09:52AM ET
www.investing.com/analysis/us-stocks-tumble-over-heightened-inflation-fears-200626942
U.S. Stocks Tumble Over Heightened Inflation Fears
By NAGA (Michalis Efthymiou)   |  Jul 11, 2022 09:52AM ET
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The price movement of the S&P 500 has declined during this morning’s Asian and European sessions. The pre-market price has so far declined by 0.81% before this afternoon’s market open. Global stock markets have generally come under pressure due to a low-risk appetite triggered by the current European gas supply uncertainty. European stocks have been falling and look sure to end the day in the red. Traders will look toward the market reaction once the US stock market opens.

S&P 500 price chart.
S&P 500 price chart.

Over the weekend, it became known that the world’s richest man, Elon Musk, is pulling out of a $44 billion deal to buy Twitter (NYSE:TWTR). The company has failed to provide reports on the number of fake accounts on the platform, which have already been requested. In addition, the management of Twitter announced plans to cut up to 30% of its HR staff due to growing business problems. Company Chairman Bret Taylor said management plans to enforce the merger agreement legally. The stocks of Twitter have fallen 4.01% so far.

Additional pressure on the US stock market is also exerted by the situation in the domestic bond market, the yield of which began to rise sharply again. The rate on the popular United States 10-Year Treasuries rose to 3.086% from 2.810%. The 20 and 30-year bonds have also significantly increased. The rise in bond yields indicates that, once again, the market's risk appetite had dropped noticeably compared to the previous week when the stock market had rallied.

Possible recession in the US economy, interest rate hikes, and high bond yields have decreased investor demand for risk-based assets in the stock market. The employment figures, released on Friday, had a mixed effect on the stock market. On the one hand, stronger employment figures may improve future economic outlook and investor demand. On the other hand, better employment figures provide more leeway for the Federal Reserve to increase interest rates further.

Currently, the best-performing stocks include: NetEase (NASDAQ:NTES) which increased by 2.67%, Tesla (NASDAQ:TSLA) which increased by 2.54%, Regeneron (NASDAQ:REGN) by 2.32% and Moderna (NASDAQ:MRNA) by 2.22%.

Twitter, Pinduoduo (NASDAQ:PDD), PayPal (NASDAQ:PYPL), MercadoLibre (NASDAQ:MELI), and JD (NASDAQ:JD) stock are among the biggest losers.

Over the next week, investors will be monitoring the Consumer Price Index scheduled to be released this Wednesday and the Quarterly Earning figures for Pepsico (NASDAQ:PEP), Morgan Stanley (NYSE:MS) (NYSE:MS), and JP Morgan (NYSE:JPM).

U.S. Stocks Tumble Over Heightened Inflation Fears
 

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U.S. Stocks Tumble Over Heightened Inflation Fears

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