Wall St closes for 3rd consecutive session on Fed rate hike concerns

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  • Best Buy sales beat estimates as discounts drive demand
  • July job openings up sharply
  • All 11 S&P sectors are down
  • Dow down 0.96%, S&P 500 down 1.10%, Nasdaq down 1.12%

NEW YORK, Aug 30 (Reuters) – U.S. stocks closed lower for a third straight session on Tuesday as rising job vacancies fueled fears that the U.S. Federal Reserve has another reason to maintain its aggressive bullish trajectory. interest rates to fight inflation.

The benchmark S&P 500 index (.SPX) has fallen more than 5% since Fed Chairman Jerome Powell on Friday reaffirmed the central bank’s determination to raise interest rates even in the face of a slowing global economy. the economy. Read more

Labor demand showed no signs of slowing as U.S. job openings hit 11.239 million in July and the previous month was revised higher. A separate report showed consumer confidence rebounded strongly in August after three consecutive monthly declines. Read more

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“They have to weaken the labor market and how are they going to do that – they’re going to freeze rates and make things so expensive that people are going to pull out, demand is going to drop and people are going to get fucked off,” said Ken Polcari, managing partner at Kace Capital Advisors in Boca Raton, Florida.

“It locks them in even more.”

The data increases the focus on August nonfarm payrolls data due Friday.

The Dow Jones Industrial Average (.DJI) fell 308.12 points, or 0.96%, to 31,790.87, the S&P 500 (.SPX) lost 44.45 points, or 1.10%, to 3,986.16 and the Nasdaq Composite (.IXIC) fell 134.53 points, or 1.12%, to 11,883.14.

New York Fed President John Williams said on Tuesday the central bank will likely have to cut its key rate to around 3.5% and is unlikely to cut interest rates next year. next as it battles inflation. Read more

However, Atlanta Fed President Raphael Bostic said in an essay published Tuesday that the Fed could “roll back” from its recent streak of 75 basis point hikes if new data shows that the inflation is “clearly” slowing down. Richmond Fed Chairman Thomas Barkin said the Fed’s promise to bring inflation back to its 2% target would not necessarily lead to a severe recession. Read more

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

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

Each of the 11 sectors of the S&P 500 was in negative territory, with the energy sector (.SPNY) down 3.36%, the largest percentage decline, as oil prices stabilized by more than 5% on fears that slowing global economies will undermine demand. Read more

Rate-sensitive megacap growth and technology stocks such as Microsoft Corp (MSFT.O), down 0.85%, and Apple Inc (AAPL.O), down 1.53%, were among the biggest drags on the benchmark.

The S&P 500 and the Nasdaq fell below their 50-day moving average. The S&P 500 also briefly fell below the 50% Fibonacci retracement level from its June low to its August high, another key technical indicator seen by analysts as support.

SPX-technical

The CBOE Volatility Index, also known as the Wall Street Fear Gauge, rose for the third straight session and hit a six-week high of 27.69 points.

Adding to concerns, the Taiwanese military fired warning shots at a Chinese drone that flew over a Taiwan-controlled islet near the Chinese coast. Read more

Best Buy Co (BBY.N) rose 1.61% as one of the S&P 500’s biggest gainers after reporting a smaller-than-expected drop in comparable quarterly sales on steep discounts. Read more

Volume on U.S. exchanges was 10.51 billion shares, compared to an average of 10.54 billion for the full session over the past 20 trading days.

Falling issues outnumbered rising ones on the NYSE by a ratio of 4.27 to 1; on the Nasdaq, a ratio of 2.44 to 1 favored the decliners.

The S&P 500 posted no new 52-week highs and 18 new lows; the Nasdaq Composite recorded 15 new highs and 217 new lows.

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Reporting by Chuck Mikolajczak; Editing by David Gregorio

Our standards: The Thomson Reuters Trust Principles.

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