US stocks gave up early gains on Monday afternoon after reports of slowing spending by technology group Apple raised fears of a potential recession.
The S&P 500 index, which was up 1% earlier in the day, fell 0.8% after Bloomberg reported that America’s most valuable company is planning to slow spending and hiring growth in the US. some parts. The Nasdaq Composite also fell 0.8%.
Fears of a potential recession have dogged markets in recent weeks as the Federal Reserve struggled to contain inflation without pushing the US economy into recession. Solid retail sales data provided some reassurance last Friday, but the Apple report suggests worries are growing even at companies that have successfully weathered the previous downturn. there.
Shares of Apple fell 2%, then rose 0.9% earlier.
US stocks got off to a good start to the day after strong gains in Europe and Asia. The broad FTSE index of Asia-Pacific shares rose nearly 2% after Chinese state media reported Beijing regulators were urging banks to fund developers after owners home boycott mortgage payments on unfinished houses.
Hong Kong’s Hang Seng index rose 2.7%, its biggest daily gain since late May, while the CSI 300 index gained 1%. The Golden Dragon Index of Chinese stocks listed in the US rose 2.5%.
European markets also rose, with the Stoxx 600 across the continent, up 0.9%.
The moves come after an upbeat session in US stocks on Friday, as strong retail sales data and a survey hint of easing inflation expectations eased worries concerned about the Fed’s drastic tightening of monetary conditions with the slowing economy.
Unexpectedly strong US inflation data last week raised concerns that the central bank could raise interest rates by a full percentage point at its next policy meeting, but expectations have fallen. Monday with the futures market hinting at an 81% chance of a smaller 0.75 percentage point gain.
“The market is weakening and when you get some slightly less bad news, the market enjoys a moment of relief,” said Roger Lee, head of equity strategy at Investec UK. .
However, he added that high inflation and potential for recession in the US and Europe means global shares could fall further, even though the FTSE All World share index is down a fifth this year.
“I don’t think investors fully appreciate the performance you’ve seen in the stock market this year as it relates to interest rates, not to the potential drop in earnings,” Lee said. We’re going into a recession.”
In the currency markets, the dollar index fell 0.6% as traders scaled back their bullish bets.
The euro, which fell below $1 last week for the first time in 20 years, rose 0.6 percent to $1.014 ahead of Thursday’s European Central Bank meeting where a rate hike is expected. deposit rate for the first time since 2011 to tackle record high inflation.
Government bond yields rose in European and American markets. Yields on the US 10-year Treasury note rose 0.06 percentage points to 2.99 percent, while the German 10-year package added 0.09 percentage points to 1.16 percent. Yields increase when prices fall.
