by Chipmakers were at the receiving end of the US attempt to impose new rules on China. The escalations in the Ukraine war also have a significant effect on investors’ appetite. The Nasdaq index consequently staged a lower opening on Monday.
Tech Takes the Hit
Nvidia Corp, Intel Corp, and Qualcomm Inc all fell between 0.2% and 1.2%. Others that dropped in a similar way are Advanced Micro Devices and Micron Technology.
Banks in the US are ready to begin the earning season of the third quarter. This will come up on Friday in the midst of the anxiety over inflationary pressure. There are also increasing interest rates and geopolitical instability concerns to consider.
Companies listed on the S&P 500 index are estimated to have gained earnings by 4.1%. That was just within the last three months. It came down from the July high of 11.1% while analysts are pricing in a more downturn in 2023.
The US gilts market was closed for Columbus Day on Monday. It is one of the semi-holidays when stocks open but bonds don’t. There are not many economic data and real market catalysts available for the market.
Trading volumes are expected to be low while stocks meander. The market will wait for a few catalysts when everyone resumes on Tuesday.
High Rate Hikes Ahead
Russian forces struck Ukraine in the early hours of Monday. The attack left several civilians dead while infrastructure was destroyed. This followed President Putin’s description of the Crimea bridge explosion as a terror attack.
Dow e-minis went up by 0.13% or 39 points at 8:38 am ET. The S&P 500 e-minis went up by 0.06% or 2.25 points. And Nasdaq e-minis, on the other hand, went down by 0.09% or 10.5 points.
Wall Street dropped sharply last Friday after the strong September jobs data. The data increased the odds that the Feds will continue with the aggressive policy. That prospect means the US economy might then enter into a recession.
The money market is pricing in about 89% possibility of a 75 basis points hike. The next meeting of the Federal Reserve comes up in November.
All economic reports are indicating price pressure. Yet, investors will closely monitor comments coming from top Fed officials. The first set is the president of the Chicago Feds, Charles Evans, and Vice Chair, Lael Brainard.
