"...The European Central Bank (ECB) will release its policy on Thursday"
Weak manufacturing data weighed on market sentiment, as investors wait to see if growth can be sustained while the US Federal Reserve waits for inflation to fall enough to cut interest rates. or not.
Gabriela Santos, chief market strategist for the Americas at JPMorgan Asset Management, said that the economy overall remains strong even if some investors are losing confidence.
A busy week of economic data continued on Tuesday, with data on jobs and factory orders for April. Key reports for the week include May payrolls, revealed on Friday.
The European Central Bank (ECB) will release its policy on Thursday, with markets indicating a 93% chance it will cut interest rates from 4% to 3.75%. A Reuters poll of 82 economists last week showed all expected an interest rate cut at the June 6 meeting, after some ECB policymakers signaled the possibility of a rate cut. ability to reduce interest rates.
The market shows an 82% chance that the Bank of Canada will reduce interest rates on Wednesday, from 5% to 4.75%. The rate increased on Friday after Canada's first-quarter GDP grew more slowly than forecast.
The Federal Deposit Insurance Corporation (FDIC) warns that 63 banks are on the brink of bankruptcy due to bad debts and falling bond prices, with banks facing losses of $517 billion. The number of problem banks is 1.4% of the total, which is within the normal range for non-crisis periods of 1% to 2% of all banks.
The FDIC said the health of the U.S. banking system is not at risk right now, but persistent inflation, high interest rates and political concerns continue to pressure banks.