New York stock markets fall with bet on interest rate hike by the Fed and Alphabet drops 12% after balance sheet
Nasdaq drops 1.38% on a day of losses in New York, while European stock markets close mostly higher after the ECB's decision.
BY THE X-TRADER NEWS NEWSROOM · REPORTING FROM MONEY TIMES · 2 MIN
The New York stock exchanges closed lower on Thursday (29), extending the previous day's losses. According to Money Times, the movement reflected the expectation of a new interest rate hike by the Federal Reserve (Fed) at the December meeting, added to the negative reaction of the shares of Alphabet, Google's parent company, which fell 12% after releasing its third quarter results.
The Nasdaq led the losses, falling 1.38%, to 26,184.724 points. The S&P 500 dropped 0.30%, to 7,720.39 points, and the Dow Jones fell 0.25%, to 52,342.56 points.
Among the factors cited by the source is concern about the increase in costs linked to artificial intelligence (AI), which weighed on the reading of Google's parent company's balance sheet.
In Europe, the scenario was opposite. According to the same vehicle, European stock markets closed mostly higher on Thursday, after the European Central Bank (ECB) kept interest rates unchanged. The Stoxx 600 rose 0.82%, to 649.43 points, and the DAX advanced 1.36%, to 26,052.75 points. The FTSE 100 gained 0.26% to 10,722.07 points, while the CAC 40 was stable at 7,970.00 points.
The two movements point to different monetary environments. On the European side, the ECB chose not to change rates, and the main indices closed higher. In the United States, the debate revolved around a possible new interest rate increase, which highlights the Fed's next decision and the reaction of technology stocks.
What changes for the investor
For those who operate stocks, the dollar and interest rates, the central point is that the expectation of higher interest rates in the United States tends to make credit more expensive and put pressure on the valuations of companies with more distant projected profits, especially those linked to technology. Therefore, the Nasdaq tends to react more intensely than the Dow Jones on days like this. It is worth monitoring the Fed's December meeting, the next balance sheets of companies that invest in AI and the behavior of the dollar, as interest rate decisions on both sides of the Atlantic usually affect the flow of capital between markets.
Automatically translated from Portuguese.
