Frankfort, New York Wall Street investors are on edge. The threatened throttling of the US Federal Reserve’s flood of money and the worsening Ukraine crisis are causing severe losses on the New York stock market. The Dow Jones index temporarily lost almost 1,000 points on Monday. At 33,150 points, it fell 3.3 percent, just as sharply as the broader S&P 500, which at 4,222 points was now 10 percent below its all-time high reached earlier in the year.
Chart technicians see this as a signal that a correction phase has begun. The index of the technology exchange Nasdaq fell by 4.9 percent to 13,094 points. In Europe, too, the stock markets fell sharply.
“If it was just Ukraine alone, people would ignore it, but that’s the final straw today,” said Gary Black, managing partner of Future Fund Active ETF (FFND). “At the same time, people worry that the Fed is making policy blunders, and that just adds uncertainty.”
With the US Federal Reserve’s interest rate decision due on Wednesday, stock market traders will be eyeing closely how concerned the Fed is about rising inflation and how aggressively it will try to contain it. The money market has already fully priced in a 25 basis point rate hike in March, as well as three more rate hikes by the end of the year.
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Ukraine crisis weighs on markets
Added to this were the increasing tensions between Russia and the West. The danger of war has never been so great, said Kremlin spokesman Dmitry Peskov in Moscow. According to Secretary General Jens Stoltenberg, the armed forces of the NATO countries are on alert.
The Ukraine issue will weigh on the markets for the foreseeable future, “until there is some kind of solution and more clarity on how things will turn out,” said Darren Schuringa, head of asset manager ASYMmetric ETFs.
Investors have fled Russian stocks, which have tumbled the most since the March 2020 coronavirus-related stock market crash. Moscow’s leading index fell by almost six percent. The Russian currency also came under pressure. In return, the dollar was trading at 79.50 rubles, its highest level since November 2020.
Cryptocurrencies also flew out of the depots. Bitcoin and Ethereum slipped by up to 15 percent and were quoted at 33,584 and 2220 dollars at the level of half a year ago. Burdened by a stronger dollar, the price of the North Sea oil Brent fell by more than two percent.
The “anti-crisis currency” gold rose in price by 0.5 percent to $1,843 per troy ounce (31.1 grams). Bonds were also popular, with the yield on the 10-year US Treasury falling to 1.726 percent.
US technology stocks lost particularly heavily, led by Tesla with a minus of eight percent. Valuations are high for many tech stocks, but if earnings don’t justify it, there’s room for continued and further corrections, Schuringa said.
Look at other individual values
Kohl’s: The prospect of a bidding war for Kohl’s gives the department store chain its biggest price jump in almost two years. Shares rose more than 34 percent to $62.87 at the Wall Street open. According to insiders, financial investor Sycamore wants to outbid Acadia’s offer of $64 per share. In the room is an offer of 65 dollars per share or a total of around nine billion dollars. Kohl’s confirmed expressions of interest but did not provide names or details.
US stock market expert Koch: “Tech stocks are really going downhill”
Peloton: Activist investor Blackwells Capital has called on the fitness equipment maker to fire its CEO and seek a sale of the company. The company’s stock is down more than 80 percent from its all-time high. After a roller coaster ride, Peloton is currently 2.8 percent higher.
GameStop and AMC: In the downward spiral of the stock exchanges, speculative objects, which are particularly popular with small investors, are also slipping. The papers of GameStop and AMC Entertainment each fall by around twelve percent. The prospect of rising interest rates is taking the wind out of gamblers’ sails, said Thomas Hayes, a managing director at Great Hill Capital. Last year GameStop was up 600 percent, AMC was up more than 1100 percent.
Coinbase: Shares of the cryptocurrency trading platform are down 9.7 percent, reflecting the cryptocurrency’s downtrend over the weekend and into the week. Bitcoin reached its lowest level since July last year.
More: What’s left of Reddit traders a year after the Gamestop rally