Wall Street Fed sustains headache while shares are mixed, Treasury wins Reuters

By Lawrence Delevingne

BOSTON (Reuters) – Wall Street suffered headaches as a result of a relatively rapid reversal of US Federal Reserve stimulus on Thursday as some shares were resold and government bond yields continued to rise.

They fell by 124.12 points, or 0.34%, to 36,282.99, 3.5 points, or 0.07%, to 4,704.08, while those added fell by 4.13 points, or 0.03%, to 15,104.30.

Shares also fell sharply in Asia and Europe after the Wall Street tech-heavy Nasdaq index fell more than 3% on Wednesday.

The benchmark 10-year earnings rose to 1.7530%, the highest since March 2021, and rose slightly last day to 1.7281%. U.S. 2-year yields, which follow expectations for near-term rates, rose to a record high of 0.8796 in March 2020, the beginning of the global expansion of COVID-19.

The minutes of the Fed meeting in December showed that a tight labor market and continued inflation could prompt US central banks to raise rates earlier than expected and start reducing overall assets.

Concerns were raised on Thursday by U.S. Department of Labor data that the number of Americans filing new unemployment benefits claims last week had risen, and the Institute for Supply Management said non-manufacturing activity fell in December.

Investors will now look at a key U.S. employment report on Friday, according to new Eurozone inflation data that the European Central Bank is looking at closely.

The global money market is now experiencing three Fed rate hikes in 2022, with the first expected in March. [/FRX]

Treasury yields rose on the curve on Thursday as traders reduced their chances of an early rise and the Fed prepared for the option to cut bonds.

The dollar took a breather as it rose to a 14-month high after the Fed chased after a minute’s wind. The latter gained 0.074% and the euro fell 0.19% to $ 1.1292.

Cryptocurrencies were one of the hardest hit in night market sales, as bitcoin fell more than 5%. It was last traded at around $ 43,291, down 0.33% on the day.

Gold prices fell to a one-week low as the minutes of the Fed pushed for alternative safe havens, such as the dollar and Treasury yields.

The $ 1,788.86 an ounce was down 1.1%. The US fell 1.87% to $ 1,790.40 an ounce.

In commodity markets, oil prices rose sharply, extending the rally of the previous session due to disruptions in supply to OPEC + oil producers in Kazakhstan and Libya.

It rose 1.72% to $ 79.19 per barrel and stood at $ 81.77, up 1.2% on the day.