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U.S. Stocks Sink as Recession Fears Return After Holiday Break

Published 07/05/2022, 09:42 AM
Updated 07/05/2022, 09:46 AM
© Reuters.

By Liz Moyer

Investing.com -- U.S. stocks are sinking on Tuesday after the long holiday weekend as investors renewed their fears about a looming recession.

At 10:29 AM ET the Dow Jones Industrial Average was down 631 points, or 2%, while the S&P 500 was down 1.8% and the NASDAQ Composite was down 1%.

This is a big week for economic data, including the monthly nonfarm employment report from the government on Friday. Before that comes out, investors will get to assess the minutes of the Federal Reserve’s most recent policy meeting and parse any hints of what actions are to come as the central bank tries to tame inflation.

Analysts have been sending mixed signals about the outlook. On Tuesday, Credit Suisse cut its S&P 500 forecast for the year to 4,300 from 4,900 though said a recession will likely be avoided. The S&P is trading around 3,756 currently.

The pessimism is weighing on sectors that normally benefit from economic growth, such as banking and travel. The KBW Bank ETF, which includes many of the biggest U.S. banks, was down 2.8%, while the U.S. Global Jets ETF (NYSE:JETS) was down 3.2%. Cruise line Carnival Corporation (NYSE:CCL) was down 4.5%, while Walmart Inc (NYSE:WMT) dipped 0.5%.

Shares of department store Kohl's Corp (NYSE:KSS) lost another 3.7% on Tuesday after falling 20% on Friday, when it said it ended deal talks.

Tesla Inc (NASDAQ:TSLA) shares lost 3.7% after reporting it delivered more than 254,000 vehicles in the second quarter, a decline of more than 17% from the first quarter.

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Oil sold off sharply. Crude Oil WTI Futures was down 5%, to around $103 a barrel and Brent Oil Futures was down 5.6% to $107 a barrel. Gold Futures fell 0.6%, to $1,791.

Also worth noting, the euro fell to the lowest level against the dollar in two decades, to around $1.0281.

Latest comments

Medicines for inflation
Medicines for inflation
Medicines for inflation
Medicines for inflation
At the rate of oil price falling today, in two weeks, oil price would be zero.
PCE price has been falling for 3 months in a row. Oil price is falling below 100 quick. Inflation is gone but deflation is the major concern. What would be Fed's excuse for any further rate hike. They have no choice but to cut the ratte now. Fed has no credibility. Fed migh have be abolished and replaced by a computer program.
US Core PCE P. Index YoY: Feb = 5.31%; Mar = 5.22%; Apr= 4.92%; May= 4.69%Falling for 3 months in a row. This is deflation, not inflation. They have to look at the rate of change.
The way oil price price falling today indicate we have deflation concern, not inflation concern.
Any further rate hiking should be a violation of Fed's mandate of maximum employment.
True, just le inflation go rampant, so smart
Fed's cutting the interest rate is no brainer. Only question is how low it would cut and how quickly they will cut.
While maintaining the little credibility they have?
Fed now has to cut the interest rate just to weaken USD. Otherwise, US economy falls to recession.
What happened to the “market shrugs off inflation and recession concerns”
That would've happened if Russia didn't persist in its aggression.
There is no recession unless they create one.
I guess that's what they want to push down oil to 70$ and make Russia suffer.
They will make the economy bahave as such. Then its all rainbows and fireworks right before elections. March 2023 all sinks again, hard. Or not
Russia should suffer for committing war crimes & causing global inflation and maybe recession  next.
before holiday no recession fear???
Market opened and has stayed red because of recession fear.
lol 🤣🤣 , these ping pong headlines.
Down because it's being manipulated, as usual.
Vehicle sales were up this morning. Has to be good for a little bump.
just looking for a few good inflection data points
There is panic selling and panic buying. People start buying before interest rates go up. I renewed my mortgage 3 months ago because I knew rates were going to go up. Simple..
how can one give same headlines .. month after month ...
Here's a hint:  Russia's invasion of Ukraine is still ongoing after starting months ago.
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