Tuesday saw steep U.S. equities decline for the second session as investors awaited June inflation data.
With oil prices under pressure and the dollar edging closer to breaking parity with the euro, the commodities and currency markets were in the spotlight for most of the trading day.
The Dow Jones Industrial Average lost 190 points, or 0.6 percent, while the S&P 500 and Nasdaq Composite ended the day by about 1 percent. In the last hour of trade, losses accelerated on all three indices.
As all eyes remained on whether the currency will go below parity, or a 1:1 ratio, with the dollar, the euro dropped as low as 1.0004 versus the dollar.
Crude oil futures fell more than 8% to trade below $96 a barrel on the energy markets, as commodities are still under pressure due to investor concerns about a possible global recession.
All of the monetary easings observed in leading countries worldwide have been undone by this year’s rise in interest rates and drop in financial markets, according to a report published on Monday by Oxford Economics senior economist Tamara Basic Vasiljev. However, in Vasiljev’s opinion, the recent decline in commodity prices indicates that inflation pressures may have peaked, which might relieve future financial circumstances.
We are likely witnessing the worst of the financial conditions tightening now that commodity prices are dropping once more, and the inflation peak appears to be within the approach, noted Vasiljev. If so, the situation is difficult, but an orderly slowdown is still more likely than a recession at this point.
Bitcoin (BTC-USD), the biggest cryptocurrency in the world, came under pressure again on Tuesday morning’s other markets, sliding below $20,000 once more after having its best week since last fall.
The second-quarter earnings season begins this week, with PepsiCo (PEP) being the first significant company to release results for the quarter before Tuesday’s market opening.
The large beverage and snack company announced sales that exceeded expectations and increased its full-year outlook.
On the move
Walmart (WMT) and the manufacturer of electric cars, Canoo (GOEV), announced a contract on Tuesday morning. As part of the agreement, Walmart agreed to buy 4,500 electric vehicles with the option of purchasing an additional 100,000. Following this statement, Canoo shares more than quadrupled; before Monday’s closure, the stock had fallen by 70% this year. Shares of Canoo closed Tuesday’s trading session up 53%.
After analysts said that remarks made by CEO Bill McDermott last night on Mad Money revealed a more pessimistic view of the software sector, shares of ServiceNow (NOW) dropped as much as 11% in the early session. Shares of ServiceNow decreased by 13% by day’s end.
Following the company’s announcement on Tuesday that it will cease all internal bike production to recover from the COVID-related boom, Peloton’s (PTON) shares increased by roughly 3%. As a result, Tuesday saw a 3.7 percent increase in Peloton stock.
Shares of LoadDepot (LDI) increased by more than 20% after the firm disclosed plans to reduce employees and concentrate on the buy and cash-out refi business due to a downturn in the housing market; shares of the company ended the day up 14%.
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