After a long weekend, US equities pared initial losses but remain under pressure.
In June, the ISM Services PMI dropped more than expected.
Oil’s biggest slump in three months has weighed heavily on energy companies.
On specific news, DIDI falls 20% while Amazon rises 4.7 percent.
Risk-aversion dominating the market, thus shares on US bourses didn’t enjoy a warm greeting after a long weekend. Nonetheless, a drop in US Treasury yields aided the Nasdaq’s tech-heavy Nasdaq to post minor gains.
Read more: Forex Today: Risk aversion boosted greenback demand
The risk-off mentality could be linked to dwindling economic optimism in the United States, as the ISM Services PMI fell below the 63.5 estimate in June, to 60.1, from 64.0 the month before. Concerns about the coronavirus (COVID-19) variant also weighed on market sentiment. Epsilon, a strain traced to California, attracted a lot of interest because of its vaccination resistance. The discussion about the third wave in the following month or two just served to amplify the covid fears.
The Dow Jones Industrial Average (DJI) is down 0.60 percent, or 208.98 points, to 34,577.37, while the S&P 500 is down 8.80 points, or 0.20 percent, to 4,343 at the end of Tuesday’s North American session. Nasdaq, on the other hand, rose 0.17 percent or 24.3 points to 14,663.60.
It’s worth mentioning that energy stocks were pulled down by oil’s worst slump, not to mention the U-turn from October 2018 highs. The price of black gold has dropped significantly as OPEC+ remains split on how to proceed.
Investors’ attention is drawn to DIDI, which continues to face the brunt of China’s crackdown over suspicions of gathering private data in violation of Beijing’s rules. Alternatively, Amazon welcomes new CEO Andy Jessy, who will succeed Jeff Bezos, with a daily upside of roughly 5.0 percent.
The minutes of the most recent Federal Open Market Committee (FOMC) meeting will be essential for the markets in the next weeks, while the covid updates may provide some intermediate entertainment.
Read more about what a reduction in yields ahead of the Fed’s minutes means for the dollar./n
