[New York Stock Market] Mixed Trends Amid Economic Slowdown Concerns... Nasdaq Closes Down 1.20%

[Image source=Reuters Yonhap News]

[Asia Economy New York=Special Correspondent Joselgina] Major indices on the U.S. New York stock market closed mixed on the 16th (local time) amid ongoing concerns over an economic slowdown.

On the day at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average rose 26.76 points (0.08%) from the previous close to finish at 32,223.42.

The S&P 500, focused on large-cap stocks, closed down 15.88 points (0.39%) at 4,008.01, while the tech-heavy Nasdaq fell 142.21 points (1.20%) to 11,662.79. The small-cap Russell 2000 index dropped 9.24 points (0.52%) to 1,783.43.

By sector, interest rate-sensitive tech stocks continued their weakness. Tesla’s stock closed down 5.88% from the previous session. Other major tech stocks such as Nvidia (-2.50%), Amazon (-1.99%), Apple (-1.07%), and Netflix (-0.60%) also declined. Cloud stocks like Datadog (-10.72%) and Cloudflare (-13.59%) slid more than 10%.

In contrast, energy stocks showed strength. Occidental Petroleum rose 5.68%, and Marathon Oil gained 3.63%. This was attributed to concerns over supply shortages following the European Union (EU)’s potential ban on Russian crude oil imports, which pushed international oil prices up more than 3%. Major pharmaceutical stocks such as Eli Lilly (+2.66%), Pfizer (+1.50%), and AbbVie (+1.28%) also showed gains.

Additionally, Twitter fell more than 8% after reports that the company’s legal team protested that Elon Musk, Tesla’s CEO, violated a confidentiality agreement related to the acquisition deal. Spirit Airlines closed up 13.49% following reports that JetBlue launched a hostile takeover attempt.

Investors continued to monitor the possibility of an economic slowdown, soaring inflation, and the Federal Reserve’s tightening measures this week.

On the same day, John Williams, President of the Federal Reserve Bank of New York, stated that the Fed needs to act more swiftly to curb inflation. He identified inflation as the Fed’s top priority and predicted a 0.5 percentage point rate hike next month.

Concerns over economic slowdown persisted as key economic indicators showed weakness. China’s retail sales in April plunged 11.1% year-on-year. The May Empire State Manufacturing Index, which reflects manufacturing activity in New York State, also fell into negative territory at -11.6, significantly below the expected 16.5.

In the bond market, the yield on the U.S. 10-year Treasury note stood at around 2.88%. The Chicago Board Options Exchange (CBOE) Volatility Index (VIX), known as Wall Street’s “fear gauge,” traded around the 27 level, down more than 4% from the previous close.

While concerns remain that the market bottom has not yet been reached, some analysts see this as an attractive entry point from a long-term investment perspective. In an investor memo, RBC Capital Markets diagnosed that the S&P 500 is struggling to find a bottom and stands at a crossroads. Goldman Sachs lowered its year-end forecast for the S&P 500. Sylvia Jablonski, CEO of Defiance ETFs, said, “I’m not saying this is the bottom yet,” but added, “It’s a good opportunity for dollar-cost averaging.”

Oil prices rose. On the same day at the New York Mercantile Exchange, June West Texas Intermediate (WTI) crude oil closed at $114.20 per barrel, up $3.71 (3.4%) from the previous session.