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Stocks tumble after weak U.S. confidence data; oil gains

Published 06/27/2022, 10:00 PM
Updated 06/28/2022, 05:36 PM
© Reuters. FILE PHOTO: A man wearing a protective mask, amid the coronavirus disease (COVID-19) outbreak, walks past an electronic board displaying graphs (top) of Nikkei index outside a brokerage in Tokyo, Japan, March 10, 2022. REUTERS/Kim Kyung-Hoon

© Reuters. FILE PHOTO: A man wearing a protective mask, amid the coronavirus disease (COVID-19) outbreak, walks past an electronic board displaying graphs (top) of Nikkei index outside a brokerage in Tokyo, Japan, March 10, 2022. REUTERS/Kim Kyung-Hoon

By Caroline Valetkevitch

NEW YORK (Reuters) - Stocks on global indexes fell sharply on Tuesday, with the S&P 500 down 2% after a report showed U.S. consumer confidence dropped in June amid concerns about inflation, while oil prices gained for a third day.

Helping oil, major oil producers Saudi Arabia and the United Arab Emirates looked unlikely to be able to lift output much while Western governments agreed to look for ways to cap the price of Russian oil.

The Conference Board said Tuesday U.S. consumer confidence fell sharply in June as worries about high inflation left consumers anticipating economic growth would weaken significantly in the second half of the year.

Investors have been worried that an aggressive interest rate hike cycle by the U.S. Federal Reserve to tame inflation could tip the economy into recession.

All three major indexes ended well down on Wall Street, with every S&P 500 sector losing ground aside from energy.

Earlier in the session, news that China relaxed some COVID-19 quarantine rules helped lift stocks as investors hoped for a revival in global growth.

"It doesn't take much in terms of negativity to cause that profit-taking," said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York.

"At some point this aggressive selling is going to dissipate, but it doesn't seem like it's going to be anytime soon," he said.

The Dow Jones Industrial Average fell 491.27 points, or 1.56%, to 30,946.99, the S&P 500 lost 78.56 points, or 2.01%, to 3,821.55 and the Nasdaq Composite dropped 343.01 points, or 2.98%, to 11,181.54.

The pan-European STOXX 600 index rose 0.27% and MSCI's gauge of stocks across the globe shed 1.28%.

China slashed the quarantine time for inbound travellers by half in a major easing of one of the world's strictest COVID-19 curbs, which have deterred cross-border travel and resulted in international flights running at just 2% of pre-pandemic levels.

Brent crude futures climbed $2.89, or 2.5%, to settle at $117.58 a barrel, while U.S. West Texas Intermediate crude settled up $2.19, or 2%, to $111.76.

In foreign exchange, the euro weakened after European Central Bank President Christine Lagarde offered no fresh insight into the central bank's policy outlook.

The dollar index rose 0.519%, with the euro down 0.61% to $1.0518.

U.S. Treasury yields were mostly flat following the consumer confidence report.

The yield on 10-year Treasury notes fell 0.2 basis points to 3.192%.

A closely watched part of the Treasury yield curve measuring the gap between yields on two- and 10-year notes, a sign of economic expectations, was at 6.6 basis points. The gap earlier briefly spiked down to -7.24 when New York trade opened.

© Reuters. FILE PHOTO - A screen displays trading informations for stocks on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., June 27, 2022.  REUTERS/Brendan McDermid

Spot gold dropped 0.1% to $1,820.29 an ounce.

Bitcoin last fell 2.1% to $20,264.23.

Latest comments

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SP500 strong G7 USA+ EU  sp500 8000 2022 GL USA
I hear enough nonsense from CNBC!!
Keyword "higher" you got that algos...that should of triggered some sheep to buy this am...u fortune ately so far we are losing 2% of last week's meager rally these past two weeks should show you what the second half of 2022 will look like get used to kt.
what would expect q1 results??
Nobody cares unless US stocks.
more likely market might go down 7% this week
fed has to continue jacking up interest rates until people's inflation expectation under control. it's the main problem for stock market for long time to come. Fed lost timing.
dow futures gets lower. stock market looks going down big tomorrow
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