Markets mixed, Fed rate hike may weaken economy

Global stock markets were mixed on Tuesday.

The US stock market managed to eke out a gain, with the S&P 500 rising 0.2 percent to end a four-day losing streak.

However, the Shanghai Composite Index slipped 0.2 percent after a four-day, 10 percent rally.

The MSCI All-Country World Index fell for a fifth consecutive day, losing 0.2 percent.

Commodities also mostly fell but West Texas Intermediate crude oil halted its four-day slide, rising 0.8 percent.

The US dollar and US Treasuries rose, with the yield on the 10-year note falling one basis point to 2.34 percent.

The rise in the US dollar, though, has been driven by expectations of an interest rate hike by the Federal Reserve. The latter would not be good for stocks, bonds or the economy, according to Jeffrey Gundlach.

“I have a hard time believing a Fed tightening will help the economy,” Gundlach said on Monday during a conference call with investors. “I think volatility will increase and the economy will weaken.”