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Wall Street retreated in the first trading session of the week in the US as rising interest rates continue pressuring investor sentiment, in addition to investors reacting to the latest batch of retail earnings raising concerns over how the consumer is faring the rising interest rate environment. The Dow Jones ended Tuesday’s session down 2.06%, the S&P500 lost 2% and the tech-heavy Nasdaq closed the day down 2.5%. The benchmark 10-year Treasury yield climbed to 3.9%, while the 2-year rate advanced to 4.7%, building on from last week’s gains as investors grappled with hotter-than-expected inflation data. Leading domestic homewares retail chain Home Depot fell 5.4% to a three-month low on Tuesday after warning of weakening demand and issuing a soft profit forecast for 2023, while Walmart, the world’s largest retailer, fell 0.2% after it forecast full-year earnings below analysts’ expectations and issued a warning of hotter-than-expected food prices squeezing profit margins.
In Europe, markets closed lower as investors weighed corporate earnings results against the potential for the US Fed to remain hawkish which enhances the fear of a recession in the coming months. Germany’s DAX fell 0.52%, the French CAC lost 0.37% and, in the UK, the FTSE100 shed 0.46% despite the UK government posting a surprise budget surplus for January. Credit Suisse shares fell on Tuesday following reports that remarks made by the company’s Chairman, Axel Lehmann regarding outflows from the lender, are being reviewed by the Swiss financial regulator on the grounds of potentially being misleading.
What to watch today: