US stocks fell sharply on recession fears, oil prices fell 3%

An electronic board at the New York Stock Exchange
An electronic board at the New York Stock Exchange (NYSE) during trading session on May 18 - Photo: Reuters.

Energy stocks, the year-to-date outperformer, tumbled this session as oil prices tumbled on concerns that a slowing economy would drag on energy demand…

US stock markets fell points in Wednesday’s trading session (June 22), after US Federal Reserve Chairman Jerome Powell acknowledged the risk of an economic recession. This is also the reason why oil prices fell by 3%, while Bitcoin price struggled to maintain the key $20,000 mark.

At the close, the Dow Jones Industrial Average fell 47.12 points, or 0.15%, to 30,483.13 points. The S&P 500 index fell 0.13% to 3,759.89. The Nasdaq index slipped 0.15%, to 11,053.08 points.

In the first day of his two-day testimony before both houses of Congress, Mr. Powell said the Fed was “strongly committed” to bringing inflation down, making it the overarching focus of monetary policy at this time. this. He also said a recession was “a possibility”. Mr. Powell’s assessment of the economic outlook immediately put downward pressure on stock prices on Wall Street, even though recession fears had already cast a shadow over the market.

“The probability of a recession is higher than the possibility of the opposite. This reflects the level of tightening the Fed is pursuing,” said Dan Greenhaus, chief strategist at Solus Alternative Asset Management. “Unfortunately there will be more economic pain than anyone could have imagined six months ago. However, people are slowly realizing what can happen.”

Energy shares, the year-to-date outperformer, tumbled this session as oil prices tumbled on concerns that a slowing economy would drag on energy demand. Among the 11 major sectors of the S&P 500, energy was the biggest loser this session.

Brent crude oil futures in London fell $2.91/barrel, or 2.5%, to close at $117.74/barrel. During the session, oil price fell to 107.03 USD/barrel at one point, the lowest since May 19.

WTI oil futures in New York fell $3.33 per barrel, or 3%, to $106.19 per barrel. During the session, prices fell to 101.53 USD/barrel at times, the lowest since May 11.

Regarding the record high gasoline prices in the US, President Joe Biden called on Congress to stop taxing federal gasoline within 3 months to relieve financial pressure on households. Meanwhile, lawmakers of both parties are hesitant on the issue.

Also on Wednesday, the White House invited the CEOs of seven major oil companies to a meeting to discuss increasing oil production and lowering gasoline prices to around $5 per gallon. Mr. Biden has long criticized the big oil companies for pocketing a lot of profits. However, he rarely speaks directly to the CEOs or representatives of these companies.

Chevron CEO Michael Wirth said that criticizing the oil industry is not the way to reduce gas prices and that the US government should change its approach. Biden responded that he didn’t think oil CEOs were “so emotionally vulnerable.”

On Thursday, Wall Street investors watched weekly labor market data. Mr. Powell continued his second day of testimony on monetary policy in Congress.

In the crypto currency market, Bitcoin is stable at the $20,000 mark. At nearly 8 am this morning Vietnam time, the Bitcoin price according to data from stood at 20,321 USD, down more than 1% compared to 24 hours ago. The total capitalization of the global cryptocurrency market stands at $892 billion, down 1.7% from 24 hours ago, and down more than 70% from the record over $3 trillion set in November last year.

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