A sharp increase in consumer spending is amplifying interest rate fears that are already rife on Wall Street. As a consequence, investors distance themselves from technology stocks such as Amazon, Microsoft and Apple. Shares in Chinese companies are also under pressure.
A surprisingly sharp rise in US consumer data has further fueled concerns about rate hikes on Wall Street. The standard value index Dow Jones closed one percent lower at 32,816 points. The tech-heavy Nasdaq fell 1.7 percent to 11,394 points. The broad S
The personal consumption expenditure (PCE) index - considered the Fed's favorite index - rose 0.6 percent in January after 0.2 percent in December. US consumer spending also rose more than expected in January, at 1.8 percent. Analysts had expected 1.3 percent. "This clearly suggests the Fed has more to do," said analyst Phil Blancato of Ladenburg Thalmann Asset Management. At the beginning of February, the monetary authorities had increased the key rate by just 0.25 percentage points. According to Blancato, an interest rate hike of 0.50 percentage points in March is now considered likely.
"Investors' greatest concern now is that the Fed will go too far in its fight and lead the economy into a recession that is not yet recognizable but will then no longer be avoidable," said Konstantin Oldenburger, market analyst at broker CMC Markets.
Investors' fears of interest rates drove the dollar index, which measures the currency against other major currencies, to its highest level in seven weeks at times at 105.32 points. In bond markets, the 10-year Treasury yield rose seven basis points to 3.971 percent. Investors also fled technology stocks like Amazon, Microsoft, Alphabet and Apple. The stocks that are particularly dependent on monetary policy lost between 1.8 and 2.4 percent. According to experts, higher interest rates will devalue the future profits of these high-growth companies.
In terms of individual stocks, shares of Chinese companies listed in the US were under pressure due to geopolitical tensions. Alibaba, JD.Com and Baidu stocks fell between four and 5.5 percent. A higher number of US troops will soon be involved in training Taiwanese armed forces, an insider said. China is not a safe place to invest right now, said Dennis Dick, an analyst and trader at broker Triple D Trading. In addition, Adobe lost more than seven percent after a media report on an antitrust lawsuit. The aim of the lawsuit by the US Department of Justice is to block the takeover of the cloud-based designer platform Figma, the Bloomberg agency reported.
At Boeing, a delivery stop of its 787 Dreamliner models put the aircraft manufacturer's securities under pressure. The titles dropped 4.8 percent. In return, investors grabbed after strong numbers at Beyond Meat. The shares of the meat substitute producer rose by more than ten percent. With its sales in the fourth quarter, the US group exceeded analysts' expectations for the first time since June 2021. As a result, at least four brokers raised the price target for the shares. According to experts, the reason for the strong numbers are cost reductions.
