NEW YORK: Global stock markets slid Friday on worries that an expected ground invasion of Gaza by Israel would spark a wider conflict in the Middle East.
Wall Street stocks declined Friday, as investors looked to lower their risk going into the weekend.
The Dow Jones Industrial Average lost 0.9 per cent, while the S&P and Nasdaq indexes fell over one per cent.
The yield on the 10-year US Treasury, which briefly rose this week to levels not seen since 2007 amid concerns the Fed is entering a long period of high interest rates, slipped slightly.
The Federal Reserve has been raising its benchmark lending rate to cool demand and bring down stubborn inflation, with some success. Nevertheless, rates remain stuck above its long-term target of two per cent.
At the same time, markets are warily eyeing on-going conflict in the Middle East, for signs it could spread to other countries.
“Going into the weekend there is a downward trend as short-term investors try to square positions,” Jack Ablin, Cresset Capital’s chief investment officer, told AFP.
“There is an unwillingness from certain investors (to) hold risk positions over the weekend,” he added.
Major stock markets in Europe closed down more than one per cent, while those in Asia also saw declines.
Oil prices finished slightly slower.
The US Federal Reserve warned Friday that the recent attack on Israel and the on-going Ukraine conflict could cause harm to the world economy and boost global inflation.
“The attack on Israel, in conjunction with Russia’s on-going war against Ukraine, has ratcheted up geopolitical tensions,” the Fed said in its semi-annual report on financial stability.
“Escalation of these conflicts or a worsening in other geopolitical tensions could reduce economic activity and boost inflation worldwide,” it added. – AFP
