Shares on Wall Street tumbled on Thur. It was not rising interest rates which sent stocks reeling. US Treasury yields dropped. Investors appear to be worrying that the rate hikes which are already priced into the bond market are going to cause a recession.
The Dow Jones Industrial Average lost 741.46 pts, or 2.42%, to close at 29,927.07. The broader S&P 500 index fell 2.42%. The tech-heavy Nasdaq Composite retreated 4.08%. The small cap Russell 2000 dropped 4.70%.
Megacap tech stocks fell on Thur, including Apple (AAPL US, -3.97%), Microsoft (MSFT US, -2.70%), Amazon (AMZN US, -3.72%), Alphabet (GOOGL US, - 3.40%), Nvidia (NVDA US, -5.60%), and Meta Platforms (META US, -5.01%).
Despite oil prices moving higher, energy (-5.5%) was the worst performing S&P sector. The front-month Brent and WTI crude oil futures closed up $1.30 at US$119.81/bbl and $2.28 at US$117.59/bbl respectively.
The consumer staple sector (-0.8%), which is somewhat recession resistant, performed relatively well, thanks to modest gains by Procter & Gamble (PG US, +0.61%) and Walmart (WMT US, +1.04%).
The yield on the 10-year Treasury note slipped 8.87 basis points (bps) to 3.1952%, while the yield on the 2-year Treasuries fell 9.75 bps to 3.0933%.
The Swiss franc strengthened almost 3% against the greenback, the biggest advance in almost seven years, after the Swiss central bank unexpectedly hiked rates on Thur.
The ICE dollar index (DXY), which measures the strength of the greenback against a basket of currencies, fell 1.45% to 103,631.
The most actively traded US gold futures (Aug) contracts settled up $30.30, or 1.67%, at US$1,849.90/oz. July silver, which is the most actively traded silver futures, rose $0.465, or 2.17%, to end at US$21.885/oz.
European equity markets finished lower on Thur. The UK FTSE lost 3.14%, France's CAC 40 fell 2.39%, while the German DAX retreated 3.31%.