Wall Street slump, nervousness and low volumes impact volatility

The New York Stock Exchange was in a low-volume market on Monday due to the shutdown of European markets and on jitters over the rise in interest rates and the escalation of the conflict in Ukraine.

As of 14:10 GMT, the Dow Jones was down 0.12%, the tech-heavy Nasdaq index was down 0.15% and the broader S&P 500 index was down 0.10%.

Within half an hour of Wall Street opening, the indices had already made several round trips between red and green.

This Easter Monday, a public holiday in Europe when stock markets are closed, “volumes will be low,” warned Spartan Capital’s Peter Cardillo. “We are heading for a turbulent market.”

Briefing.com’s Patrick O’Hare said the indices’ hesitancy “rather corresponds to a lack of buyers,” he wrote in a note.

The weekend was marked by a new escalation of the conflict in Ukraine, marked by bombing raids on several cities in the country, especially Lviv, so far relatively spared.

For Peter Cardillo, the recovery of the dollar, but also of oil and gold, testified to this nervousness on the markets. Another indicator, the VIX index, which measures market volatility, regained height after falling on Friday.

Also of concern is the sharp rise in interest rates, which has come along with proactive statements from the US Federal Reserve (Fed) that is accelerating to chase inflation.

The benchmark yield for 10-year US Treasuries rose to 2.87% on Monday for the first time since December 2018.

Some market participants fear an economic slowdown or even a recession, which analysts at Goldman Sachs estimate at a 35% probability over the next two years.

Wall Street also fears China will tread water after the country on Monday reported a slowdown in industrial production growth in March, a month marked by containment measures and factory closures.

Finally, according to Peter Cardillo, the New York Stock Exchange is digesting the first wave of corporate earnings that took place last week.

In a turbulent zone since the announcement of Elon Musk’s stake, Twitter rebounded Monday, gaining 3.19% to $46.52.

The platform’s former chief executive and co-founder, Jack Dorsey, said in a series of tweets on Sunday that the board overwhelmingly opposed to acquiring Elon Musk was a point of “the company’s dysfunction.”

Wall Street welcomed Bank of America’s results (+2.33% to $38.44) which, despite being down, came in ahead of expectations. The private customer business was able to compensate for the weakening in investment banking with a significant increase in lending volume.

China’s Uber Didi Chuxing bounced back (-10.97% to $2.19) after reporting a nearly 13% drop in sales on Saturday. It has also set May 23 as the date for the AGM to ratify the delisting from the New York Stock Exchange.

Another target of investors, asset management company Charles Schwab (-11.15% to $73.52), which was guilty of below-expected earnings and profit and fell, was weighed down by the decline in transactions .

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