Wall St fell for a 3rd straight session on concerns about a Fed rate hike

A trader works on the floor of the New York Stock Exchange (NYSE) in New York City, USA on August 29, 2022. REUTERS/Brendan McDermid

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  • Best Buy beat sales estimates as discounts fueled demand
  • Job opportunities will increase sharply in July
  • The Dow was down 1.02%, the S&P 500 was down 1.22% and the Nasdaq was down 1.45%.

Aug 30 (Reuters) – U.S. stocks fell for a third straight session on Tuesday as a rise in job prospects fueled concerns that the U.S. Federal Reserve has another reason to maintain an aggressive path of interest rate hikes to fight inflation.

Benchmark S&P 500 Index (.SPX) It has fallen more than 5% since Federal Reserve Chairman Jerome Powell on Friday reaffirmed the central bank’s commitment to raising interest rates even in the face of a sluggish economy. read more

Labor demand shows no signs of cooling as U.S. job openings rose to 11.239 million in July and rose sharply the previous month. A separate report showed consumer confidence rebounded strongly in August after three consecutive monthly declines. read more

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“It’s feeding into a strong labor market, which points to the apparent concern of consumers and is working against what the market actually expects,” said Andre Bagos, managing member of Ingenium Analytics LLC in Plainsboro, New Jersey.

“One might consider this to be good news ordinarily, however, we have considered the inflation area and these kinds of numbers don’t play well in trying to reduce inflation, at least that’s the perception of the market.”

The focus is on non-August farm payrolls data due on Friday.

Dow Jones Industrial Average (.DJI) The S&P 500 fell 327.54 points, or 1.02%, to 31,771.45. (.SPX) The Nasdaq Composite lost 49.12 points, or 1.22%, to 3,981.49. (.IXIC) 173.88 points or 1.45% down at 11,843.79.

New York Fed President John Williams said on Tuesday that the central bank should keep its policy rate at around 3.5% and is unlikely to cut interest rates next year as it battles inflation.

However, Richmond Fed President Thomas Parkin said the Fed could “pull back” from its recent 75 basis point rate hikes if new data show inflation is “clearly” slowing, Atlanta Fed President Rafael Bostic said in an article published Tuesday. Bringing inflation back to its 2% target will not cause a severe recession. read more

Traders are pricing in a 74.5% chance of a third straight 75 basis point rate hike at the central bank’s September meeting.

Every one of the 11 S&P 500 sectors was in negative territory, including the energy sector (.SPNY) Oil prices fell 3.27% as they fell more than 5% on worries that a slowdown in global economies will dampen demand. read more

The key 10-year Treasury yield erased early morning losses to trade higher at 3.119%.

Rate-sensitive megacap growth and technology stocks like Microsoft Corp (MSFT.O)Apple Inc. was down 1.32% (AAPL.O)Off 1.69%, the biggest drag on the benchmark index.

Both the S&P 500 and Nasdaq have broken below their 50-day moving averages. The S&P 500 fell below the 50% Fibonacci retracement level from its June low to August high, another key technical indicator supported by analysts.

SPX Technology

The CBOE Volatility Index, also known as Wall Street’s fear gauge, rose for a third straight session and last traded at 26.92 points.

Adding to the concerns, Taiwan’s military fired warning shots at a Chinese drone that buzzed over a Taiwanese-controlled island near the Chinese coast. read more

Best Buy Co (BBY.N)Still, up 2.25%, it was the biggest gainer in the S&P 500, which posted a smaller-than-expected drop in quarterly comparable sales due to steep discounts. read more

Declining issues outnumber advancing issues by a 4.83-to-1 ratio on the NYSE; On the Nasdaq, a 2.92-to-1 ratio favored decliners.

S&P 500 not posting new 52-week highs and 18 new lows; The Nasdaq Composite posted 7 new highs and 196 new lows.

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Report by Chuck Mikolajczak; Editing by David Gregorio

Our Standards: Thomson Reuters Trust Principles.

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