Fed, energy costs and war: Wall Street suffers from fears of rate hikes

Federal Reserve, energy costs and war
Wall Street suffers from fears of rate hikes

The state of the world isn’t exactly something investors are excited about right now. In addition, energy prices and the prospect of tighter monetary policy by the Federal Reserve are rising. At the beginning of the week, there was reluctance in the US stock markets, but there is also cause for optimism.

Wall Street started weaker at the start of the new trading week. According to brokers, investors are concerned about a sharp tightening of monetary policy by the US Federal Reserve with rising interest rates. The Dow Jones Industrial Average closed down 0.1 percent at 34,412 points, the S&P 500 was almost unchanged. The tech-heavy Nasdaq Composite was also down 0.1 percent. “The Fed’s monetary policy, skyrocketing energy costs and economic problems caused by the war in Ukraine will weigh on markets in the coming weeks unless a solution is found,” said Rick Meckler, partner at investment firm Cherry Lane Investments.

The situation could improve if the numerous quarterly reports due in the coming weeks pan out well, brokers said. So far, balance sheets have met expectations, said Peter Cardillo, chief economist at Spartan Capital Securities in New York. “There have been some negative forecasts, but overall it looks like corporate America can live with higher inflation and a higher cost of money.”

Bank of America made surprisingly good profit in the first quarter thanks to its fast-growing consumer lending business. The shares gained 3.4 percent. Over the course of the week, Netflix, Tesla, Johnson & Johnson and IBM, among others, presented figures. Twitter Newspapers gained 7.5 percent. The group defended itself with a “poison pill” against a surge in shares by Tesla boss Elon Musk. makes it difficult for large investors to increase their stake.

Tesla shares rose 2.0 percent. According to insider sources, the US electric carmaker called its employees to the factory in Shanghai. The economic metropolis was locked down for three weeks due to an outbreak of the Omikron corona variant.

Oil prices continued to rise after oil prices rose sharply ahead of the long weekend amid concerns about an EU import embargo on Russian oil products. Added to this were political uncertainties and production cuts in Libya. The price of a barrel of the US variety WTI rose 0.9 percent to $107.91. Gold benefited slightly from its supposed “safe haven” status given the ongoing war in Ukraine. The price of a troy ounce rose 0.2 percent to 1978 dollars.

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