Wall chain closes for 3rd straight session on Fed interest rate hike worries

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
  • All 11 S&P sectors declined

Aug 30 (Reuters) – U.S. stock markets fell for a third straight session on Tuesday as a rise in jobs prompted fears 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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“They’re going to weaken the labor market, and that’s how they’re going to do it — they’re going to drive up prices, make things more expensive, people are going to lay off, demand is going to go down, and people are going to be hired. Off,” said Ken Polgari, of Case Capital Advisors in Boca Raton, Florida. Managing Partner.

“It locks them in even more.”

The focus is on August nonfarm payrolls data due on Friday.

According to preliminary data, the S&P 500 (.SPX) It lost 44.47 points, or 1.10%, to end at 3,986.14 points, while the Nasdaq Composite (.IXIC) It lost 128.85 points or 1.07% to 11,888.82. Dow Jones Industrial Average (.DJI) It fell 308.68 points or 0.95% to 31,790.31.

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) The biggest percentage decline came as oil prices fell more than 5% on worries that a slowdown in global economies would dampen demand. read more

Rate-sensitive megacap growth and technology stocks like Microsoft Corp (MSFT.O)and Apple Inc (AAPL.O)The benchmark was one of the index’s biggest drags.

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, hitting a six-week high of 27.69 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)However, the S&P 500 was the biggest gainer after it reported a smaller-than-expected drop in quarterly comparable sales due to steep discounts. read more

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Report by Chuck Mikolajczak; Editing by David Gregorio

Our Standards: Thomson Reuters Trust Principles.

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