Stocks fell again on Wall Street, posting losses for the third time as traders fear high interest rates will continue for some time. The S&P 500 fell his 1.1% on Tuesday, taking his 5.1% loss over the past three days. The Dow Jones Industrial Average and Nasdaq also fell. Energy companies fell as oil prices fell. Tech and industrial stocks were also weak. Best Buy gained momentum after reporting far better results for its latest quarter than analysts had expected. Yields on 10-year government bonds are stable.
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Stocks were down on Wall Street in Tuesday afternoon trading, with investors fearing high interest rates won’t go away any time soon as the Federal Reserve battles inflation. of skids have been extended.
The S&P 500 was down 0.9% as of 3:24 pm ET. The benchmark index closed on a downward pace for the third straight day, with him down 3.3% in the month of August with his one trading day remaining.
The Dow Jones Industrial Average fell 233 points (0.7%) to 31,861, while the Nasdaq fell 1%.
Small business stocks also fell, with the Russell 2000 index down 1.4%.
Markets have softened since Federal Reserve Chairman Jerome Powell said on Friday that the Fed would stick to its strategy of raising interest rates to keep inflation at a 40-year high.
Megan Horneman, chief investment officer at Verdence Capital Advisors, said the latest wave of selling reflected a “hangover” from Powell’s speech last week and uncertainty ahead of Friday’s Labor Department’s monthly employment report. is doing.
Markets are trying to get a better sense of “how far and how fast the Fed has to go” to slow the economy to fight inflation.
A strong report on the job market on Tuesday morning further dampened hopes that the Fed could ease its anti-inflation measures. The higher interest rates imposed by the Federal Reserve are intended to keep inflation in check by slowing the economy, including the pace of employment.
The government reported 11.2 million job openings at the end of July. On average, this equates to almost two jobs for each unemployed person. That number is up from his June figure of 11 million, and the June figure has also been revised significantly higher.
“Employers will have to increase incentives to fill jobs, which can lead to inflation,” said CFRA chief investment strategist Sam Stovall. “I don’t see consistently encouraging numbers.”
Wall Street worries that the Fed could put the brakes on an already slowing economy too much and plunge it into recession. Rising interest rates also hit investment prices, especially more expensive stocks.
The central bank has already raised rates four times this year and is expected to raise short-term rates by another 0.75 percentage points at its next meeting in September, according to CME Group.
The major indexes were higher in July and early August, hoping that the deterioration in economic data would lead the Fed to ease its high interest rate policy. These gains followed weakness in the first half of the year, when the S&P 500 fell 20% from its recent highs and entered a bear market.
Investors are closely watching economic data for additional signs that the economy is slowing or that inflation may be falling, or at least staying at current levels. Businesses and consumers have been hit hard by rising prices for everything from food to clothing, but the recent drop in gas prices has given them some relief.
Consumers regained some confidence in August, according to a survey by The Conference Board. Consumer confidence rose this month after falling for three straight months. It also beat economists’ expectations.
Technology stocks dominated the market. Chip maker Nvidia fell 2.4%. Energy stocks fell with US oil prices, which he fell 5.5% to settle at $91.64 a barrel. Chevron fell 2.4%.
US oil prices have risen more than 43% this year, but have fallen nearly 5% this month.
“The biggest challenge with oil is the fact that the Fed basically says it will create economic pain in order to try to bring down inflation, and usually in the event of an economic slowdown or recession, energy prices will fall,” Hornman said.
Best Buy was a bright spot, up 2.8% after reporting much better last quarter results than analysts had expected.
Yields on 10-year government bonds are stable at 3.11%.
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