US stocks mixed amid growing recession fears

9:35 am: Wall Street mixed at the open

US stocks opened weakly as recession fears continued to cast a shadow over investor confidence.

Just after the open, the Dow Jones Industrial Average was up 80 points or 0.3% at 29,283 points, the S&P 500 was up 8 points or 0.2% at 3,655 points and the Nasdaq Composite was down. by 9 points or 0.1% to 10,821 points.

Biopharmaceutical company Mind Medicine Inc had fallen more than 52% after the company announced a proposed public offering on Tuesday.

Apple was down about 3% at the open on reports the company was easing plans to ramp up production of the new iPhone 14 after demand fell short of expectations.

On the other hand, Biogen Inc’s stock had jumped about 40% following positive results from a clinical trial involving the company’s experimental Alzheimer’s drug, which found that the drug slowed the progression of Alzheimer’s disease by 27% compared to a placebo.

6:30 a.m.: Retreat, retreat

U.S. stocks are set to pull back further, continuing their slide from last week as investors expect the economy to reel under the weight of the Federal Reserve’s aggressive interest rate hikes.

Futures on the Dow Jones Industrial Average fell 0.9% in premarket trading, while those on the S&P 500 lost 1.2% and contracts on the Nasdaq-100 fell 1.6% .

All three indices have now slipped into bearish territory, roughly defined as levels around 20% below recent highs. Meanwhile, the dollar continues to strengthen across the board and US Treasury yields have risen.

Stock prices have fallen since the middle of last week, when the Federal Reserve announced its third consecutive 75 basis point interest rate hike and signaled that it would continue to raise rates to combat the galloping inflation.

Ipek Ozkardeskaya, senior analyst at Swissquote Bank, noted that the hawkish rhetoric from ratemakers has not dissipated.

She quoted James Bullard, president of the Federal Reserve Bank of St. Louis, as reportedly saying he expects interest rates up to 4.5%, a full percentage point higher than expected in April, and Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, normally a dovish member of the Fed, saying the Fed’s actions are “rightfully” aggressive.

“Squeezing the global economy like a lemon may not be the best idea, and moving so fast given the global context – war, energy crisis – will not make up for the fact that the Fed waited too long before to take action against inflation last year,” Ozkardeskaya said.

“So it’s quite possible that after wrongly insisting that inflation was ‘transient’, the Fed could now make a second big mistake by tightening beyond what is appropriate,” he said. -she adds.

Russia’s continued aggression in Ukraine and the ensuing energy crisis are some of the main factors behind rising price pressures. The turbulence in the foreign exchange markets, with the pound falling sharply while the dollar continues to appreciate, also adds to the general gloom.

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