NEW YORK (AFP) – Wall Street stocks tumbled on Tuesday (June 28) as a gloomy consumer confidence report offset positive news about China’s move to scale back Covid-19 restrictions.
Equities opened solidly higher but dropped into negative territory soon thereafter following a consumer confidence reading at its lowest level in more than a year on surging inflation.
The downcast report was due in part to the feeling higher prices would persist, suggesting consumers aren’t sure the Federal Reserve’s aggressive efforts to tame inflation will work.
“We could have some difficult days ahead of us,” said Meeschaert Financial Services’ Gregori Volokhine.
The Dow Jones Industrial Average dropped 1.6 per cent, a loss of nearly 500 points, to close at 30,946.99.
The broad-based S&P 500 shed 2 per cent to 3,821.55, while the tech-rich Nasdaq Composite Index sank 3 per cent to 11,181.54.
Stocks opened higher after China reduced the length of mandatory quarantine for inbound travellers, in the biggest relaxation of entry restrictions after sticking to a rigid zero-Covid policy throughout the pandemic.
But on top of the consumer data, investor sentiment also was weighed down by an uptick in crude prices and a rebound in the yield on the 10-year US Treasury note, a proxy for interest rate expectations.
Among individual companies, Nike dropped 7 per cent after it projected tepid sales growth ahead even as it reported quarterly results that topped expectations.
The sporting goods giant described a number of headwinds, including elevated freight costs, persistent supply chain worries amid the possibility of additional Covid-19 lockdowns and the rising US dollar.