US stocks continued their downward trend on Tuesday, in a day in which safe-haven assets gained ground amid investor nerves over theto tension between Russia and the West and the prospect that the Federal Reserve will tighten monetary policy soon.
According to preliminary data, the S&P 500 lost 54.05 points, or 1.23%, to finish at 4,356.08 points. The index has not stopped falling throughout the month and has now lost 9.2% from the all-time high it reached on the first trading day of the year.
Meanwhile he Nasdaq Composite lost 311.35 points, or 2.26%, to 13,543.78 and the Industrial Average Dow Jones it fell 54.31 points, or 0.16%, to 34,310.19.
The three major Wall Street indices resumed the heavy sell-off that briefly stalled around Monday’s close. US stocks last week posted their worst week since 2020. Global stocks are headed for their biggest monthly drop since the COVID-19 pandemic hit markets in March 2020.
The accumulation of Russian troops on the Ukrainian border has caused fears of an invasion. NATO said Monday that it has put its troops on alert and will reinforce eastern Europe with more ships and fighters.
The Fed began a two-day meeting on Tuesday in which it is expected to offer a orientation about the adjustment trajectory of your monetary politics, as investors await the first post-pandemic interest rate hike in March.
The tightening of monetary policy usually hurt higher risk assets, like stocks, and makes government debt more attractive to investors.
After a weak Asian session in which stock indices extended Wall Street’s losses, European markets rose slightly after Monday’s sharp plunge. Global stocks have declined 6.5% this month, the biggest drop since the 13.8% monthly decline suffered when the COVID-19 pandemic hit markets in February 2020.
”What we have seen is a combination of increased geopolitical risk … combined with downside market risk from the tighter Fedsaid Eddie Cheng of Allspring Global Investments.
Share sales had limited impact on rate markets, as investors expect the Fed and Bank of England to raise rates this year by about 100 basis points.
Although investors don’t expect a rate hike at this week’s Fed meeting, the market sees a 5.4% chance of this happening, according to Refinitiv data at Eikon.
The performance of Treasury bond US 10yr was trading at 1.7405%, down slightly on the session as investors favored safer havens.
The index dollar improved 0.3%, while the euro-dollar fell.
The prices of raw they gained around 1.5% as geopolitical tensions fueled supply fears.
The cryptocurrencies they kept going down. Bitcoin was trading around $36,070, after hitting a six-month low of $32,950.72 on Monday.
(With information from Reuters)