Wall Street opens deep in negative territory on global growth worries
- US yield curve inversion sparks recession fears.
- Disappointing data from China and Germany weigh on growth outlook.
- Falling crude oil prices drag energy shares lower.
Wall Street's main indexes started the day deep in the negative territory on Wednesday as signalled by the sharp drop witnessed in the stocks futures. As of writing, the Dow Jones Industrial Average and the Nasdaq Composite were both down 1.5% on the day while the S&P 500 was erasing 1.4%.
Disappointing retail sales and industrial production data from China earlier today couple with the gloomy growth data from Germany, which showed 0.1% contraction in the economic activity in the second quarter, revived concerns over a sharp slowdown in the global economic growth and weighed on the US Treasury bond yields.
With the 10-year and the 2-year US Treasury bond yields inverting for the first time since 2007, worries over a recession in the US also hurt the market sentiment.
Among the 11-major S&P 500 sectors, the Energy Index is down 2.8% on the day while the Financials and Technology indexes are erasing 1.8% and 1.5%. On the other hand, the defensive Utilities Index stays in the positive territory in the early trade to confirm the market mood.
Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
