August 8, 2022

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Wall Street dips, dollar gains on economic, geopolitical concerns

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NEW YORK — U.S. stocks ended a choppy session lower on Tuesday, while the dollar rallied as risk appetite was dampened by economic uncertainties and escalating U.S.-China tensions.

All three major U.S. stock indexes closed red, with the blue-chip Dow faring worst. Economically sensitive transports underperformed the broader market.

Meanwhile, the safe-haven greenback had a better day than most asset classes, jumping 0.8% against a basket of world currencies.

U.S. House of Representatives Speaker Nancy Pelosi’s arrival in Taipei, despite warnings from Beijing, prompted Chinese war planes to buzz the Taiwan Strait in protest.

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“There is the uncertainty surrounding Pelosi’s trip to Taiwan and there’s additional data, regarding economic softness,” said Sam Stovall, chief investment strategist of CFRA Research in New York. “Regarding recession, it’s not a question of ‘if’ but ‘when and how deep.’”

On the economic front, a report from the Labor Department showed job openings in the United States dropped by 5.4% in June, a sign that the labor market is easing amid softening demand.

That softening demand for workers could translate to cooling wage inflation, and analysts expect Friday’s employment report to show hourly earnings growth cooled 0.2 percentage point last month to 4.9%.

Still, comments by Fed officials suggested more interest rate hikes are in the offing.

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“What’s happening in the markets is a push-and-pull about where we are economically,” said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago. “It’s a matter of whether the Fed continue to raise…

Reuters

2022-08-02 16:49:50

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