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Hawkish ECB sinks Nasdaq, Dow, S&P 500

  • Nasdaq 100 and other tech stocks fall amid a hawkish ECB
  • The ASX 200 continues to be vulnerable to lockdowns in China, slowing global growth.
  • Analysts looking at China’s CPI data and whether it will keep the People’s Bank of China on its toes in the midst of stimulatory measures.

Consensus further deteriorated on Wall Street, reflecting on Thursday’s investing session. The major base stock indexes had their worst performance since 18th May 2022. Notably, the Nasdaq 100, Dow Jones and S&P 500 fell 2.7%,1.9% and 2.4%, respectively. 

Until recently, the European Central Bank (ECB) was considered a dovish central bank. However, President Christine Lagarde downplayed this notion amidst increasing inflationary pressures.

The ECB heightened inflation expectations and, at the same time, downgraded the growth forecasts. It plans to help asset purchases in July and increase interest rates. 

With the bank taking a hawkish side, this means fears about liquidity draining from financial markets and rising bond yield, which undermines the risk-sensitive assets. 

The tech sector was one of the worst performing in the S&P at -2.38% by close of trading on Thursday. Materials, Utilities, Financials, and Communication Services followed suit.

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  • Zahari Rangelov

    Zahari Rangelov is an experienced professional Forex trader and trading mentor with knowledge in technical and fundamental analysis, medium-term trading strategies, risk management and diversification. He has been involved in the foreign exchange markets since 2005, when he opened his first live account in 2007. Currently, Zahari is the Head of Sales & Business Development at TraderFactor's London branch. He provides lectures during webinars and seminars for traders on topics such as; Psychology of market participants’ moods, Investments & speculation with different financial instruments and Automated Expert Advisors & signal providers. Zahari’s success lies in his application of research-backed techniques and practices that have helped him become a successful forex trader, a mentor to many traders, and a respected authority figure within the trading community.

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