US Stocks Retreat Amid Rising Recession Fears

Strategic Insights -

US stocks opened lower on Wednesday as rising recession fears crushed investor confidence. The Dow dipped 211 points at 32,970 points, the S&P 500 was down 25 points at 4,136 points, and the Nasdaq had shed 49 points at 12,126 points. Pharmaceutical company Novavax Inc's shares were up about 6% following the news that its COVID-19 vaccine has been recommended for adult use by the US Food and Drug Administration's vaccine advisory committee. Chinese tech stocks, including Alibaba Group (NYSE:BABA) Holding Limited, were also boosted by the country's approval of publishing licences for 60 videogames on Tuesday, signalling an easing of regulatory pressures for the broader Chinese tech sector.

Key Takeaways:

  • The odds of a recession are likely to increase over the next few months, according to an analyst note from Deutsche Bank chief U.S. economist Matthew Luzzetti.
  • The Dow closed Wednesday down 269 points, 0.8%, at 32,911, the Nasdaq lost 89 points, 0.7%, to 12,086, while the S&P 500 declined 45 points, 1.1%, to 4,116.
  • The 10-year Treasury yield jumped back above 3%, a move that may be weighing on sentiment against a bleak economic outlook.
  • Pharmaceutical company Novavax Inc's shares were up about 6% following the news that its COVID-19 vaccine has been recommended for adult use by the US Food and Drug Administration's vaccine advisory committee.
  • Chinese tech stocks, including Alibaba Group (NYSE:BABA) Holding Limited, were also boosted by the country's approval of publishing licences for 60 videogames on Tuesday.
  • The rally in oil prices looks here to stay, adding to overall inflationary pressures.
  • Morgan Stanley recently said that the probability of a US recession jumped from 5% to 35% since the start of the year.

Statistics:

  • The Dow dipped 211 points at 32,970 points.
  • The S&P 500 was down 25 points at 4,136 points.
  • The Nasdaq had shed 49 points at 12,126 points.
  • Novavax Inc's shares were up about 6% following the news that its COVID-19 vaccine has been recommended for adult use by the US Food and Drug Administration's vaccine advisory committee.
  • Oil prices jumped above $120 a barrel, adding to overall inflationary pressures.
  • The 10-year Treasury yield jumped back above 3%, a move that may be weighing on sentiment against a bleak economic outlook.
  • The probability of a US recession jumped from 5% to 35% since the start of the year, according to Morgan Stanley.

Sources:

  • CNBC
  • Deutsche Bank
  • Swissquote
  • Morgan Stanley
  • US Food and Drug Administration