Breaking News
Black Friday SALE: Up to 54% off InvestingPro! Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Wall Street shares mixed as traders position for rate hikes, oil jumps

EconomyNov 23, 2021 05:06PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
2/2 © Reuters. FILE PHOTO: A man watches an electric board showing Nikkei index outside a brokerage at a business district in Tokyo, Japan, June 21, 2021. REUTERS/Kim Kyung-Hoon 2/2

By Chris Prentice and Tommy Wilkes

WASHINGTON/LONDON (Reuters) - Wall Street shares were mixed on Tuesday and the dollar slipped from a 16-month high as investors positioned for interest rate hikes in 2022 after Federal Reserve Chairman Jerome Powell was nominated for a second term.

European shares slumped to a three-week low during their biggest daily loss in nearly two months as a resurgence in COVID-19 cases raised fears of tighter restrictions.

Oil prices jumped to a one-week high after a move on Tuesday by the United States and other consumer nations to release tens of thousands of barrels of oil from reserves fell short of some expectations.

In a historic rout, the Turkish lira plunged 15% and crashed to another record low during its second-worst day ever as investors panicked after President Tayyip Erdogan defended recent rate cuts and showed little concern for rising inflation.

Graphic: Lira volatility https://fingfx.thomsonreuters.com/gfx/mkt/xmvjorwmrpr/Lira%20volatility.png

Higher Treasury yields weighed on major U.S. technology stocks, pressuring the tech-heavy Nasdaq. Bank shares extended the previous day's gains, limiting losses elsewhere.

Unofficially, the Dow Jones Industrial Average rose 0.54% to end at 35,813.28 points, while the S&P 500 .SPX gained 0.17% to 4,690.69. The Nasdaq Composite dropped 0.5% to 15,775.14.

"It's possible that interest rates will be moved higher earlier than expected," said Rick Meckler, partner at Cherry Lane Investments in New Vernon, New Jersey.

"But that result, while positive for bank stocks, is not positive for the rest of the stock market, particularly technology, which trades on very high price/earnings multiples."

The pan-European STOXX 600 shed 1.3%, with only the oil & gas and basic resources sectors trading higher.

U.S. President Joe Biden on Monday tapped Powell to continue as Fed chair, and Lael Brainard, the other top candidate for the job, as vice chair. The news initially buoyed Wall Street stocks, before the market pulled back in the afternoon with the S&P 500 and Nasdaq Composite closing well off all-time highs.

The sense that a second term under Powell could add to policymakers' desire to curb rising inflation also sent investors buying dollars.

The dollar index, which tracks the greenback versus a basket of six currencies, fell 0.07%. The euro rose 0.12%, recovering slightly from a July 2020 low on better-than-expected business growth data.

U.S. Treasury yields were higher in choppy trading as investors prepared for the Fed to become more aggressive in fighting inflation, though two-year note yields dipped after hitting their highest level since early March 2020 on Monday.

"Interest rate hike expectations advanced with the market now pricing almost three hikes into 2022," Steen Jakobsen, chief investment officer at Saxo Bank, said.

Market expectations for a first European Central Bank rate rise were brought forward to December 2022.

COVID CONCERNS

New concerns about the spread of COVID-19 added to the gloomy mood. Riskier assets have been shaken in recent sessions by surging COVID-19 cases in Europe and renewed curbs, dousing investor hopes of a quick recovery in consumption and growth worldwide.

Germany's outgoing Chancellor Angela Merkel said the latest surge was the worst experienced by the country so far, while Austria went into a new lockdown on Monday.

The Euro STOXX 50 volatility index, Europe's main gauge of stock market anxiety, touched its highest level in almost seven weeks.

U.S. gold futures settled down 1.3% at $1,783 per ounce, also under pressure from the rate hike bets.

Elsewhere in commodities, oil prices rallied after the United States said it would release millions of barrels of oil from strategic reserves in coordination with China, India, South Korea, Japan and Britain, to try to cool prices.

But analysts said the effect on prices was likely to be short-lived after years of declining investment in production and a strong global recovery from the COVID-19 pandemic.

Brent futures rose $2.61, or 3.3%, to settle at $82.31, while U.S. crude rose $1.75, or 2.3%, to settle at $78.50.

Wall Street shares mixed as traders position for rate hikes, oil jumps
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (8)
Ac Tektrader
Ac Tektrader Nov 24, 2021 1:49AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
the dollar is technically signaling it wants to move into higher prices. this could slow down or even lower the price of crude. We will soon see...... if the dollar fails here, then oil will continue it's climb to higher prices at a faster pace.
Ac Tektrader
Ac Tektrader Nov 24, 2021 1:39AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
joker ....appropriate description.... the dollar is strong because massive global financial inflows are investing in dollar denominated assets, that includes the American Stock, Bond and Note markets. until there are more sellers in these markets, the dollar will be in a bull market. the fed can only control the fx markets for short periods of time; most of the actions in the fx markets are moved by trans national financial players not single entities.
Fong SH
Fong SH Nov 23, 2021 10:46PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Every month US is always talking about interest rates hikes, already numbed with these news, there won't be any interest rates hikes maybe until mid 2022. Come on, analysts really have nothing to write anymore, no directions at all. US debts is at all time high, at 28 trillion coming to 29 soon. Revenue at 4 trillion, GDP 23 trillion, what's there to be happy about? Celebrate? Please write something that we don't know, all these figures can be found. Rates hikes? it's like a daily bread. Cheers.
Karabo barrywhite
Karabo barrywhite Nov 23, 2021 5:57PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
we are expecting higher inflation ( xauusd )
Francesco Lucchesi
Francesco Lucchesi Nov 23, 2021 11:46AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
the renomination is totally a non Event. he will never increase rates
Radium King
Radium King Nov 23, 2021 11:42AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
FED would prefer higher inflation over a broken market.
DrFunkenstein hayson
DrFunkenstein hayson Nov 23, 2021 10:21AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
what a circus act. powell being renominated means nothing. the fed can never raise rates again. what don't people understand? the fed is done, the game is over
Ron Love
Ron Love Nov 23, 2021 10:21AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
So Fed just going to ignore one of their two mandates forever? 🤔
Jokers R Us
Jokers R Us Nov 23, 2021 4:43AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Why are people still talking about.a rate hike when the Fed already said they won't even discuss a rate hike until the taper is finished? Stop this blatant DXY manipulation.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email