On Thursday, US stocks pulled back a day after the market’s largest Federal Reserve-induced rally this year.
Concerns about poor global economic growth sent Wall Street and other stock markets in the world lower.
According to The Wall Street Journal, the Dow Jones Industrial Average dropped 0.5% or 78 points to 16,909 while the S&P 500 Index dropped 0.5% or 11 points to 1,958. The Nasdaq Composite Index declined 0.6% or 27 points to 4,439.
Stocks have been trading poorly since the S&P 500 hit a high on September 18, amid signs of slowing global growth. The Dow Jones has swung more than 200 points in four of the last six trading days.
The Dow’s rebound of 275 points on Wednesday nearly erased the 273 points decline of Tuesday.
The minutes of last month’s meeting of the Federal Reserve officials, who expressed concern that the strong dollar and the weak economies overseas could hit some of US big companies’ bottom lines, sparked the rally.
Investors shrugged off the encouraging US jobless data and turned their focus to the slowing global economic growth, which might depress the corporate profits of major companies.
Newedge brokerage co-head of financial futures and options, David Robin said, “The Fed was on the glide path toward beginning to tighten. Now, reading the minutes, you can make the argument that they’re not even close.”
Reuters reported that the dollar gave up its recent gains and the US benchmark bond yields hit lows that were seen more than one year ago.
Interactive Brokers LLC chief market analyst, Andrew Wilkinson said, “The Fed notes that the stronger dollar, which could automatically depress demand for US exports, is already depressing commodity prices that in turn is likely to contain inflationary pressures.”
Energy shares were the largest losers on Wall Street, continuing the recent trend of declines due to dropping oil prices.
To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/
To contact the reporter of the story: Jonathan Millet at email@example.com