US stocks gave up early gains Monday afternoon after reports of slowing growth at tech giant Apple reignited concerns over a possible recession.
The S&P 500, which was up as much as 1 percent earlier in the day, fell 0.5 percent shortly after Bloomberg reported that America’s most valuable company plans to slow growth in hiring and spending in some areas. The Nasdaq Composite was also 0.5 percent lower.
Apple shares fell 1.5 percent in afternoon trade after rising 0.9 percent earlier.
US stocks had started the day well after strong gains in Europe and Asia. A broad FTSE index of Asia-Pacific stocks rose nearly 2 percent after Chinese state media reported Beijing regulators were urging banks to finance developers after homeowners boycotted mortgage payments on unfinished houses.
Hong Kong’s Hang Seng index rose 2.7 percent, its biggest one-day gain since late May, while the CSI 300 index rose 1 percent. The Golden Dragon index of US-listed Chinese stocks rose 2.5 percent.
European markets also rallied, with the continental Stoxx 600 up 0.9 percent.
The moves followed a positive session for US stocks on Friday, as strong retail sales data and a survey pointing to easing inflation expectations dampened concerns about the Federal Reserve’s aggressive tightening of monetary conditions amid the slowing economy.
Stronger-than-expected US inflation data last week had fueled fears that the Fed could hike rates by a full percentage point at its next meeting, but expectations had eased by Monday as futures markets saw an 81% chance of a smaller 0 .75 percentage points implied.
“The market is weak and when you get a little less bad news, the market is enjoying a moment of relief,” said Roger Lee, Investec’s head of UK equity strategy.
However, he added that high inflation and the potential for recessions in the US and Europe mean global stocks could fall further, despite the FTSE All World stock index falling by a fifth this year.
“I don’t think investors fully realize that the performance you’ve seen in stocks so far this year has nothing to do with interest rates alone, it has nothing to do with potential earnings downgrades if we go into a slowdown advised,” Lee said.
In the currency markets, the dollar index fell 0.7 percent as traders trimmed their rate hike bets.
The euro, which last week fell below $1 for the first time in 20 years, rose 0.6 percent to $1.015 ahead of a Thursday meeting of the European Central Bank that is expected to change its deposit rate increases for the first time since 2011 to cope with record inflation.
Government bond yields rose in European and American markets. The US 10-year Treasury yield rose 0.03 percentage point to 2.96 percent, while the German 10-year Bund rose 0.09 percentage point to 1.16 percent. Yields rise when prices fall.
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