S&P 500 posts worst first-half fall since 1970

Wall Street lost ground on the last day of the financial year, and the benchmark S&P 500 index posted its worst first-half year fall since 1970.

US stocks have been sold sharply this year because of concerns that the US central bank's interest rate could lead to the collapse of the North American economy.

Overnight, the Dow Jones index dropped 0.8 per cent to 30,775, the S&P 500 index fell 0.9 per cent to 3,785 and the Nasdaq Composite lost 1.3 per cent to 11,029.

All three major US stock indexes ended in negative territory in the month and the second quarter.

Both the S&P 500 and the Nasdaq Composite index are in a bear market, down more than 20 per cent from their peak.

The Dow suffered its biggest first-half percentage drop since 1962, while the Nasdaq saw its biggest percentage fall for the six months from January to June.

The year started with spiking cases of COVID 19 due to the variant of Omicron COVID 19

Then came Russia's invasion of Ukraine, decades-high inflation and aggressive interest rate hikes from the Federal Reserve, which have sparked fears of a possible recession.

It has been a tug of war between inflation and slowing growth, balancing tightening financial conditions to address inflation concerns, but trying to avoid panic, said Paul Kim, chief executive officer at Simplify ETFs.

Economic data shows that US consumer spending rose less than expected in May as cars remained scarce, while higher prices forced people to cut back on spending.

Oliver Pursche, of Wealthspire Advisors, said consumer spending has started to slow down.

Inflation is taking its toll on the average consumer and that translates to corporate earnings, which is what drives the stock market. European stocks saw their worst quarter since the start of the epidemic in early 2020.

The FTSE 100 index lost nearly 2 per cent to 7,169 overnight, the DAX decreased by 1.7 per cent to 12,784 in Germany and the CAC 40 in Paris fell 1.5 per cent to 5,923.

The Australian market ended up in the red last day of the financial year, with the ASX 200 index falling by nearly 2 per cent and posting its worst month since the outbreak began in March 2020.

The ASX SPI 200 index was up 0.2 per cent to 6,473 at 7: 30 am AEST, but the market is going to rise today, as the ASX SPI 200 index went up by 0.2 per cent to 6,473 at 7: 30 am AEST.

The Australian dollar was buying around 69 US cents at 7: 30 am AEST.

Oil prices fell by more than 3 per cent as major oil-producing group OPEC confirmed it would maintain previously announced production increases despite tight global supplies due to the war in Ukraine.

Brent crude oil was down 1.2 per cent to US 114.88 a barrel at 7: 30 am AEST, while West Texas crude fell 3.4 per cent to US 106.10 a barrel.

Spot gold lost 0.5 per cent to US 1807.22 an ounce.