U.S. stocks weakened today, led by technology companies. Market sentiment was negatively affected by the renewed escalation of conflict in the Middle East, which led to a sharp rise in oil prices.
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Technology stocks led market decline
The Dow Jones index, which includes shares of 30 leading American companies, lost 0.26 percent and closed at 52,498.64 points. The broader S&P 500 index fell 0.79 percent to 7,515.34 points, and the Nasdaq Composite index, which includes many advanced technology companies, dropped as much as 1.55 percent to 25,873.18 points.
Over the weekend and today, intense rocket and drone attacks took place between American and Iranian forces. U.S. President Donald Trump announced today that the U.S. is reinstating a blockade against Iran in the Strait of Hormuz and will charge ships a fee of 20 percent of the value of transported cargo for security. Approximately one-fifth of the world’s oil supplies passed through the Strait of Hormuz before the conflict began.
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Investors await inflation data and Fed chair’s testimony
Traders are now waiting for data on June consumer price developments in the United States, which the U.S. government will release on Tuesday. In addition, the new Federal Reserve chair Kevin Warsh will deliver his first congressional testimony on the state of the economy on Tuesday since taking office. “These events should provide financial markets with a much clearer direction,” said analyst Joel Kruger of LMAX Group, according to Reuters.
On the foreign exchange market, the U.S. dollar strengthened slightly today. The euro lost almost 0.3 percent against the dollar shortly after 10:00 PM CEST and was trading near 1.1380 USD. The Japanese yen came under pressure after a Reuters report that the Japanese government has no immediate plans to change the direction of state pension fund investments. Shortly after 10:00 PM CEST, the dollar gained nearly half a percent against the yen and was near 162.45 JPY. On Friday, the Japanese yen strengthened in response to a statement by Japanese Finance Minister Satsuki Katayama that the government would seek ways to encourage pension funds to increase investments in domestic financial assets.
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Source: ČTK
