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Wall Street Close: Bulls pause as optimistic August ends with mixed clues

  • US equities post mild losses amid anxious market ahead of US jobs report.
  • Chatters over ECB cutting bond purchases and downbeat US data weigh on mood.
  • Zoom slumps on expectations of easy demand following the covid-led boom.
  • US ADP, ISM Manufacturing PMI will be the key to watch.

US stock markets end August with a pinch of salt as investors await the key data amid chatters over monetary policy adjustments in the US and Europe. Also weighing the market sentiment could be downbeat data and geopolitical tensions. However, easing covid numbers favor the bulls.

That said, Dow Jones Industrial Average (DJI) drops around 40 points or 0.11% to 35,360 whereas Nasdaq lost 6.7 points or 0.04% to end the day near 15,259. Further, S&P 500 was the biggest loser, down 0.13% or 6.11 points, to 4,522.

Strong inflation numbers from Eurozone renew calls of the European Central Bank’s (ECB) reduction in the weekly bond purchases, currently around 20 billion euros, which in turn joined the Fed’s tapering woes and probed the bulls.

Further, the mixed prints of US housing and second-tier activity numbers joined the pre-NFP anxiety and downbeat consumer confidence figures to also weigh on the market sentiment.

It’s worth noting that the US House efforts to target China listings and Sino-American tussles over covid origin also weigh on the market sentiment.

Alternatively, receding virus numbers and vaccine optimism joins the upbeat comments from Fed policymakers, followed Fed Chair Jerome Powell’s remarks, keep the bulls hopeful.

Against this backdrop, the US 10-year Treasury yields snapped a two-day downtrend to add 2.3 basis points (bps) to 1.307% whereas the US Dollar Index (DXY) dropped to the lowest since August 04, becomes consolidating gains to 92.65 by the end of Tuesday’s North American trading session.

Stock-specific news highlights Zoom’s over 16% south-run, despite upbeat earnings, as the video communications company estimates slowing down of demand. Kansas City Southern dropped around 4.0% after the US rail regulator rejected a voting trust structure that would have allowed Canadian National Railway Co. to proceed with its $29 billion proposed acquisition of its U.S. peer, per Reuters. Further, Wells Fargo slipped over 5.0% of fears of regulatory action while NXP Semiconductors marked a 5.5% daily loss on insider selling.

Looking forward, US employment-related data and ISM Manufacturing PMI for August will be important for the near-term market direction ahead of Friday’s jobs report.

Read: ISM Manufacturing PMI Preview: Why it could be the trigger for a big greenback comeback

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