After two weeks of losses, the New York Stock Exchange has returned to trading at its lowest level.
Wall Street began the week with further losses in stocks on Monday, as investors prepared for an interest rate hike by central banks to fight inflation.
The S&P 500 fell 0.9%, the Nasdaq 1.5% and the Dow Jones 0.5%. The main indices recover after two weeks of losses.
The recent wave of sales has extended to the fifth day the fall of the main indices, which have chained two weeks of declines.
Markets fall as hopes for a more conservative Federal Reserve diminish amid stubbornly high inflation. Last week, the central bank raised its forecast for how long interest rates would need to remain high to contain inflation that has hurt businesses and threatened spending. The European Central Bank (ECB) has also warned that an increase in interest rates is imminent.
Technology companies and retailers were hit the hardest. Microsoft shares fell 2.2% and Home Depot shares fell 2.1%.
Facebook's parent company fell 4.1 percent after the European association accused the company of violating antitrust rules by distorting competition in the online advertising sector.
Crude oil prices in the United States rose 1.2%. European markets rose, while Asian markets closed lower overnight.
The income of the Ministry of Finance increases. The yield on the 10-year migux, which affects mortgage rates, rose to 3.58 percent from 3.49 percent on Friday.
This week, investors will have to examine various economic reports to determine how inflation will evolve.
The National Association of Realtors will release on Wednesday home sales in the United States for the month of November. Home sales are expected to decline, but housing market prices remain high.
The Conference Board is expected to release its December report on consumer confidence on Wednesday. Consumer confidence and spending is another strong area of the economy, but inflation is starting to squeeze consumers even more.
On Friday, the Government will publish the personal consumption price index for November. This report is followed by the Federal Reserve as a barometer of inflation.
Previous week The Federal Reserve concluded its last meeting of the year by raising short-term interest rates by half a percentage point. It is the seventh time in a row this year. More importantly, he signaled that he may have to keep interest rates higher for longer than Wall Street anticipated to rein in inflation.
The federal funds rate is between 4.25% and 4.5%, the highest level in the last 15 years. Those responsible for the Federal Reserve foresee that the central bank's interest rate will be between 5% and 5.25% at the end of 2023. Their forecasts do not contemplate a rate cut until 2024.
Inflation shows signs of slowing down, but quite slowly. The Fed's misguided policy risks slowing the economy too much, even if economic growth is already slowing under the pressure of inflation. That could cause a recession. Analysts expect this to happen in 2023, although it is difficult to predict the severity and duration of economic conditions.