Shares extend losses after reverse sales

Shares in the United States fell on Thursday as investors continued to read out the minutes of the Central Bank’s last policy meeting, which hinted that officials were in a position to take tougher action to curb inflation.

The S&P 500 was down 0.4% and the Dow Jones industrial average was down 300 points. The Nasdaq was down 0.5%. The technology-heavy index, which started the week with a 2% jump, peaked its second round in a row on Wednesday and fell by 2.2%. At the same time, the 10-year yield on the Treasury rose again, returning 2.637% – the highest in three years.

Conversations described in the minutes of the Central Bank 15-16. March, published on Wednesday, indicated that politicians would soon begin to unwind the Central Bank’s $ 9 trillion balance sheet, including $ 4 trillion in asset acquisitions raised to calm markets after the global pandemic in early 2020. also indicated many participants in the Federal Open Market Committee (FOMC) “would have preferred a 50 basis point increase” on the benchmark interest rate in March, when the Fed raised interest rates for the first time since 2018.

“When these minutes were released this afternoon, I think what you actually saw was the strengthening around the news that the central bank is very much planning to fight inflation,” Lisa Erickson, the US Federal Reserve’s deputy director, told Yahoo Finance Live.

Economists at the Bank of America, which recently changed the central bank to include 50-point interest rate hikes in June and July, said on Wednesday night that the newly issued minutes showed sufficient evidence to tilt the scales towards a double rise in May.

“The fact is that we are in an unknown place here and the central bank has a difficult task unwinding the huge amount of monetary support in recent years,” said Charlie Ripley, senior investment adviser at Allianz Investment Management. “Against this background, it is very possible that uncertainty about monetary policy will continue to be embedded in the markets, and that is exactly what we have witnessed with recent changes in interest rates and risk assets.

Another headwind that investors need to keep navigating is the developments in the war between Russia and Ukraine. The United States imposed a second round of sanctions on Wednesday, banning US investment in Russia. The sanctions also applied to Sberbank and Alfabank in Russia, two of the country’s largest financial institutions, as well as two adult daughters of President Vladimir Putin, the wife and daughter of Russian Foreign Minister Sergei Lavrov and senior members of Russia’s Security Council. The latest sanctions, however, lacked energy trade.

Janet Yellen, the US Treasury Secretary, warned in a testimony before the House Financial Services Committee on Wednesday that Russia’s war on Ukraine would have “enormous economic consequences worldwide”, including disruption to food flows and energy.

Yellen also said that Russia should be expelled from the forum’s 20 main economies and that the United States would boycott the “number of G20 meetings” if Russian officials participated.

10:32 ET: Mortgage rates rise by 5%

The rise in mortgage rates shows no signs of slowing, as interest rates on the most common mortgages have reached their highest level since December 2018 this week.

Interest rates on 30-year mortgages jumped to 4.72% from 4.67% last week, according to Freddie Mac. The exchange rate has risen by almost a full percentage point since the first week of March and has risen by 1.5 points since the beginning of the year. The increase also marks the fastest three-month increase since May 1994.

“For the real estate market, the sharp rise in mortgage rates over the last quarter marks a turning point,” said George Ratiu, head of economic research at Realtor.com, in a statement. “For many American families, mortgage rates today are closing the door on being able to afford to buy a home this spring.”

9:30 am ET: Shares fall for the third day in a row as investors weigh Fed minutes

Here are the main movements in the markets at the opening bell on Thursday:

  • S&P 500 (^ GSPC): -6.00 (-0.13%) at 4,475.15

  • Dow (^ DJI): -88.56 (-0.26%) at 34,407.95

  • Nasdaq (^ IXIC): -315.35 (-2.22%) at 13,888.82

  • crude oil (CL = F): + $ 0.92 (+ 0.96%) to $ 97.15 a barrel

  • Gold (GC = F): + $ 8.20 (+ 0.43%) to $ 1,931.30 an ounce

  • 10-year Treasury (^ TNX): +2.4 bps to return 2.6330%

8:37 am ET: New unemployment rates fall sharply to low since 1968

Unemployment insurance applications fell sharply in the latest weekly data to a low since 1968, marking the third week in a row that new claims were below 200,000, as new layoffs and layoffs remained low compared to pandemic averages.

The latest weekly report from the Directorate of Labor on unemployment claims showed that 166,000 claims were submitted in the week ending April 2, and came in better than the 200,000 economists that the Bloomberg survey had expected.

New claims in the previous week were also revised significantly down to 171,000, from the 202,000 previously reported at the end of March. Before the pandemic, new demands averaged about 218,000 per week throughout 2019.

“The labor market seems to be moving past the pandemic, rapidly recovering,” wrote Rubeela Farooqi, the US chief economist at High Frequency Economics. “Even where the labor market is tight, which indicates optimism about the economic situation, four decades of high prices are lowering expectations.

Some of the fluctuations in the latest weekly information on unemployment claims probably reflect a change in the way the Ministry of Labor adjusted the figures to take into account seasonal factors. As of Thursday’s report, the Department of Labor was back to using “multiple” seasonal adjustment coefficients for the data, but throughout the pandemic, the agency had used “increasing” seasonal adjustment coefficients to offset large-scale data changes.

7:40 ET: HP shares rise after Buffett’s 11% stake

Warren Buffet’s Berkshire Hathaway in a new listing late Wednesday revealed that the company had accumulated 121 million shares in HP – an 11.4% stake valued at $ 4.2 billion.

Shares of HP (HPQ) rose more than 13% in pre-market trading on Thursday.

“Berkshire Hathaway is one of the world’s most respected investors and we welcome those who have invested in HP Inc.,” an HP spokesman told Yahoo Finance in an email.

The acquisition is the latest acquisition in a recent Berkshire Hathaway shopping spree. Buffet also acquired a nearly 15% stake (worth $ 7.6 billion) in Occidental Petroleum (OXY) last month.

7:10 ET: Contracts for S&P 500, Dow and Nasdaq edge higher after sale

This is how US equities traded in the future before Thursday:

  • S&P 500 futures contracts (ES = F): +9.25 points (+ 0.21%) at 4,485.00

  • Dow Future (YM = F): +15.00 points (+ 0.04%) at 34,414.00

  • Nasdaq Future (NQ = F): +53.50 points (+ 0.37%) to 14,558.75

  • crude oil (CL = F): + $ 1.49 (+ 1.55%) at $ 97.72 a barrel

  • Gold (GC = F): + $ 6.70 (+ 0.35%) to $ 1,929.80 per ounce

  • 10-year Treasury (^ TNX): +0.00 bps to return 2.6090%

18:13 ET Wednesday: The future is muted after a two-day losing streak

Here’s where the markets were trading for the night batch on Wednesday:

  • S&P 500 futures contracts (ES = F): -3.00 points (-0.07%) at 4,472.75

  • Dow Future (YM = F): -29.00 points (-0.08%) to 34,370.00

  • Nasdaq Future (NQ = F): -1.00 points (-0.01%) at 14,504.25

  • crude oil (CL = F): + $ 1.52 (+ 1.58%) at $ 97.75 a barrel

  • Gold (GC = F): + $ 5.00 (+ 0.26%) to $ 1,928.10 an ounce

  • 10-year Treasury (^ TNX): +5.3 bps to return 2.6090%

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, USA, April 4, 2022. REUTERS / Brendan McDermid

Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc

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