Traders work on the floor of the New York Stock Exchange (NYSE) on July 25, 2022 in New York City.
Spencer Platt | Getty Images News | Getty Images
This report comes from today’s CNBC Daily Open, our new international markets newscast. CNBC Daily Open updates investors on everything they need to know, wherever they are. Like what you see? You can subscribe here.
US stocks fall as Treasury yields widen their inversion. The US economy is giving mixed signals.
What you need to know today
- US stocks closed lower on Thursday, giving up a midday rally. The Nasdaq posted the biggest loss of the major indices, down 1.02%. Asia-Pacific fell broadly on Wednesday, although Chinese markets beat the trend and rose.
- Speaking of activists, Dan Loeb’s Third Point hedge fund is the latest activist investor to take a stake in Salesforce, CNBC has confirmed. He joins ValueAct Capital, Elliott Management and Starboard Value. Salesforce has recently been hit by slowing revenue growth and criticism that it paid too much for targets like Slack.
The bottom line
January’s rally appears to be running out of steam as investors process the strange state of the US economy.
Weekly jobless claims in the United States reached 196,000 for the week ending February 4. Although this is an increase of 13,000 from the previous week, it is still one of the lowest figures in history. Still, the number is higher than analysts had expected and runs counter to January jobs data, which showed record unemployment.
Despite a buoyant labor market, the Treasury yield curve remains inverted, which means that the yield on the 2-year Treasury exceeds that of the 10-year Treasury. On Thursday, the inversion deepened. It usually indicates that investors are worried about short-term market conditions, and sometimes it signals a recession.
These economic signals, combined with the Federal Reserve’s continued hawkish tone, seemed to give investors pause. On Thursday, US stocks continued their two-day losing streak. The Dow Jones Industrial Average lost 0.73% and the S&P 500 fell 0.9%. The tech-heavy Nasdaq Composite, weighed down by a 4% drop in Google’s parent Alphabet and a 3% decline in Meta, fell 1.02%.
Until economic data paints a more consistent picture of the US economy, markets are likely to remain choppy.
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