Wall Street wheezed to more losses as it limped to the finish of its worst week in six months.
The S&P 500 slipped 9.94 points, or 0.2 per cent after a late-day swoon erased a modest gain it had held for most of the day. It capped an ugly slide caused by Wall Street’s growing understanding that interest rates likely won’t come down much anytime soon.The Dow Jones fell 0.3 per cent and the Nasdaq composite dipped 0.1 per cent. It sets up the Australian sharemarket for more losses, with futures pointing to a dip of 18 points, or 0.3 per cent, at the open.
The two-year Treasury yield, which moves more closely with expectations for the Fed, dipped to 5.10 per cent from 5.15 per cent.When bonds are paying more in interest, investors are less willing to pay high prices for stocks. High rates hit particularly hard on stocks seen as the most expensive or forcing investors to wait the longest for big growth in the future.
The Fed indicated Wednesday it may raise its main interest rate one more time this year. From there, the most commonly predicted path by Fed officials would be half a percentage point of cuts in 2024 from a level of 5.50 per cent to 5.75 per cent. Three months ago, Fed officials were thinking a full percentage point of cuts may be the likeliest outcome.High rates drag down inflation by intentionally slowing the economy and denting prices for investments.
A report on Friday suggested business activity across the economy is stagnating. A preliminary measure of output compiled by S&P Global slipped to a seven-month low as businesses in services industries lost momentum. Demand was muted for both services and manufacturing providers.
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