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Stocks decline as yields, dollar rise amid global demand worries
Published by Jessica Weisman-Pitts
Posted on September 5, 2023
3 min readLast updated: January 31, 2026
Global Banking & Finance Review®
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Published by Jessica Weisman-Pitts
Posted on September 5, 2023
3 min readLast updated: January 31, 2026
By Caroline Valetkevitch
NEW YORK (Reuters) -World stock indexes eased and the U.S. dollar rose on Tuesday as economic data in China and Europe fueled worries about slowing global growth.
Also, U.S. benchmark Treasury yields jumped, while the Aussia dollar fell after the Reserve Bank of Australia kept rates steady.
A private-sector survey showed on Tuesday that China’s services activity expanded at the slowest pace in eight months in August as weak demand continued to dog the world’s second-largest economy.
Data from the euro area and Britain also showed a decline in business activity last month, with the dominant services industry in both regions falling into contraction.
“Worries are on the rise about a China and Europe-led slowdown in global growth. As a result the dollar is catching a solid safe haven bid,” said Joe Manimbo, senior market analyst at Convera, in Washington.
The U.S. dollar index was up 0.5% at 104.69. The index hit a near 6-month high of 104.85 earlier in the session.
Wall Street stocks dipped with growth stocks as Treasury yields rose.
The Dow Jones Industrial Average fell 47.25 points, or 0.14%, to 34,790.46, the S&P 500 lost 8.04 points, or 0.18%, to 4,507.73 and the Nasdaq Composite dropped 11.31 points, or 0.08%, to 14,020.51.
The pan-European STOXX 600 index lost 0.23% and MSCI’s gauge of stocks across the globe shed 0.40%.
Some investors are hoping that Beijing’s policy stimulus may be enough to stabilize the Chinese economy.
In the U.S., focus is also on Federal Reserve speakers and the outlook for interest rates.
Fed Governor Christopher Waller said on Tuesday the latest round of economic data was giving the U.S. central bank space to see if it needs to raise interest rates again, while noting that he currently sees nothing that would force a move toward boosting the cost of short-term borrowing again.
Benchmark 10-year notes were up 8.1 basis points to 4.254%.
The Australian dollar shed over 1% and dropped to its lowest level since November after the country’s central bank held rates at 4.10% and said recent data were consistent with inflation returning to the 2% to 3% target range in late 2025.
In commodities, U.S. crude recently rose 2.64% to $87.81 per barrel and Brent was at $90.95, up 2.19% on the day. [O/R]
U.S. markets were closed on Monday for the Labor Day holiday, leading to light trading volumes.
(Reporting by Caroline Valetkevitch; Additional reporting by Saqib Iqbal Ahmed in New York, Samuel Indyk in London and Ankur Banerjee; Editing by Stephen Coates, Kim Coghill, Christina Fincher, Shounak Dasgupta and Mike Harrison)
The U.S. dollar index measures the value of the U.S. dollar against a basket of foreign currencies. It is used to gauge the dollar's strength in the global market.
Economic growth refers to an increase in the production of goods and services in an economy over a period of time, typically measured by GDP.
Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power. Central banks attempt to limit inflation to keep the economy running smoothly.
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