MSCI World Stock Index posts steepest decline ever in first half

  • The S&P 500 closes its books on the biggest drop in the first half since 1970
  • Treasury yields slide for third straight day
  • Oil falls on uncertainty over future OPEC+ production

NEW YORK, June 30 (Reuters) – The MSCI global stock index posted its biggest percentage drop in the first half of the year on Thursday, while the U.S. benchmark S&P 500 index saw its biggest percentage drop in six first months since 1970.

Behind the slides are concerns about the war between Ukraine and Russia, soaring inflation, rising interest rates and, more recently, a possible recession in the United States.

Yields on the benchmark Treasury bill have risen about 150 basis points since the start of the year, the biggest first-half increase since the first six months of 1994.

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Adding to the jitters on Thursday, a report from the Commerce Department showed that US consumer spending grew less than expected in May. While the report suggested inflation had likely peaked, price pressures were still strong enough to leave the US Federal Reserve on its aggressive policy-tightening course. Read more

“Inflation is not something we don’t have to worry about anymore. It’s expected to be with us for a while,” said Sam Stovall, chief investment strategist at CFRA. At New York.

Central bank chiefs from the Fed, European Central Bank and Bank of England met in Portugal this week and expressed a renewed commitment to controlling inflation, no matter how much pain it causes.

The Dow Jones Industrial Average (.DJI) fell 253.88 points, or 0.82%, to 30,775.43, the S&P 500 (.SPX) fell 33.45 points, or 0.88%, to 3,785.38 and the Nasdaq Composite (.IXIC) fell 149.16 points, or 1.33%, to 11,028.74.

Since the start of the year, the S&P 500 has lost 20.6%.

The pan-European STOXX 600 index (.STOXX) lost 1.5% and the MSCI gauge of stocks across the world (.MIWD00000PUS) lost 1.12%.

The MSCI World Stock Index fell 20.9% in the first half of 2022.

The Fed’s aggressiveness and investors’ desire for liquidity in difficult times helped support the US dollar.

The US dollar index gained 6.5% for the quarter, its biggest quarterly jump since the last quarter of 2016. The index is up 9.4% year-to-date.

On Thursday, the dollar index fell 0.343%, with the euro down 0.01% at $1.0481.

Bitcoin last fell 5.92% to $18,904.06.

Treasury yields fell for a third straight day on Thursday as investors continued to worry about a possible U.S. recession. The yield on 10-year Treasuries fell 10.4 basis points to 2.989% as long-term safe-haven buying pushed prices higher and yields lower.

Oil prices fell about 3% on the day. OPEC+ confirmed it would only increase production in August as much as previously announced, but left investors wondering about future production. Read more

Brent crude futures for September delivery fell $3.42, or 3%, to settle at $109.03 a barrel. The August contract, which expires Thursday, fell $1.45, or 1.3%, to settle at $114.81 a barrel. U.S. crude futures fell $4.02, or 3.7%, to settle at $105.76.

Spot gold fell 0.5% to $1,807.21 an ounce.

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Reporting by Caroline Valetkevitch in New York Additional reporting by Thomas Wilkes in London and Wayne Cole in Sydney and Amruta Khandekar Editing by Gareth Jones, Matthew Lewis and Deepa Babington

Our standards: The Thomson Reuters Trust Principles.


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