US stocks fall as Apple reportedly slows hiring
U.S. stocks gave up their first gains on Monday afternoon after reports of slowing spending by technology group Apple rekindled worries about a possible recession.
The S&P 500, which rose 1% earlier in the day, fell 0.8% after Bloomberg reported that America’s most valuable company planned to slow growth in hiring and spending in some divisions. The Nasdaq Composite also slipped 0.8%.
Fears of a potential recession have been hovering over markets in recent weeks as the Federal Reserve struggles to control inflation without pushing the US economy into contraction. Strong retail sales data provided reassurance last Friday, but the Apple report suggested concerns are growing even at companies that have weathered previous downturns.
Apple shares fell 2%, after rising as much as 0.9% earlier.
US stocks had started the day with a bang after strong gains in Europe and Asia. A broad FTSE index of Asia-Pacific stocks rose nearly 2% after Chinese state media reported that regulators in Beijing were urging banks to finance developers following a boycott by property owners on the mortgage payments on unfinished homes.
Hong Kong’s Hang Seng index jumped 2.7%, its biggest daily rise since late May, while the CSI 300 index rose 1%. The Golden Dragon Index of US-listed Chinese stocks rose 2.5%.
European markets also rose, with the continent-wide Stoxx 600 up 0.9%.
The moves followed a bullish session for U.S. stocks on Friday, as strong retail sales data and a survey hinting at easing inflation expectations tempered concerns over the Fed’s aggressive tightening of monetary conditions. with the slowing economy.
Unexpected U.S. inflation data last week fueled fears the central bank could raise rates by a full percentage point at its next policy meeting, but expectations eased on Monday as futures markets implying an 81% probability of a smaller increase of 0.75 percentage points. .
“The market is weak and when you get some less bad news, the market enjoys a moment of relief,” said Roger Lee, head of UK equity strategy at Investec.
However, he added that high inflation and the potential for recession in the United States and Europe meant global stocks could fall further, despite the FTSE All World stock index falling by a fifth this year.
“I don’t think investors fully appreciate that the performance you’ve seen in equities so far this year is purely interest rate driven, it has nothing to do with potential downgrades to earnings as we enter a downturn,” Lee said.
In the currency markets, the dollar index fell 0.6% as traders cut bets on rising rates.
The euro, which fell below $1 last week for the first time in 20 years, rose 0.6% to $1.014 ahead of a meeting of the European Central Bank on Thursday, at which it is expected to rise. its deposit rate for the first time since 2011 to combat record inflation.
Government bond yields rose in European and US markets. The 10-year US Treasury yield climbed 0.06 percentage points to 2.99%, while the 10-year German Bund rose 0.09 percentage points to 1.16%. Yields rise when prices fall.