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Independence Day: US Stock Market Slump

US stocks are expected to open lower following the Independence Day holiday, as contracts on the S&P 500 and Nasdaq 100 fell over 0.5%.

European markets also saw a decline, with the Stoxx Europe 600 Index sliding 0.6%. Concerns over weakening mineral demand from China led to a retreat in mining stocks. Additionally, Casino Guichard-Perrachon SA experienced a significant plunge of up to 42% as investors assessed various rescue offers for the troubled French grocer. On the other hand, European bonds gained, resulting in Germany’s 10-year yield dipping four basis points to 2.41%.

The global economic slowdown and tightening policies by major central banks such as the Federal Reserve and European Central Bank are dampening demand for equities. Fabiana Fedeli, the chief investment officer for equities and multi-assets at M&G Plc, warned of an impending slowdown but suggested it was too early to abandon risk assets entirely. The anticipation of further interest rate hikes from the Fed and the ECB in July has raised borrowing costs, causing concerns among traders.

Chinese equities experienced deepening losses after the Caixin China Services purchasing managers’ index fell below expectations. The fading optimism over China’s outlook has led investors to lower their expectations for gains in Asian equities this year. Meanwhile, oil prices remained steady after rallying due to output cuts by Saudi Arabia and Russia, while gold prices saw little change.

Overall, the markets are grappling with economic slowdown concerns and geopolitical uncertainties, prompting caution among investors and analysts alike.