Wall Street tumbles as Fed hikes sterling rate

  • Megacap growth stocks fall on rising yields
  • Oil prices add to inflation concerns after OPEC+ production cut
  • US weekly jobless claims rise more than expected
  • Indices down: Dow down 0.94%, S&P 0.74%, Nasdaq 0.38%

Oct 6 (Reuters) – Major Wall Street indexes fell further on Thursday as concerns mounted ahead of closely watched monthly nonfarm payrolls figures that the Federal Reserve’s aggressive interest rate stance would lead to a recession.

Before falling further, markets briefly took comfort in data that showed a rise in weekly jobless claims, as it raised hopes that the Fed could ease the steady rate hikes it has been implementing since March – the fastest ever. and the highest for decades.

The stock market has been slow to recognize a consistent message from Fed officials that rates will rise for longer until the pace of inflation clearly slows.

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Chicago Fed President Charles Evans was the latest to elaborate on the central bank’s outlook on Thursday, saying policymakers expect rate hikes of 125 basis points before the end of the year, the inflation figures being disappointing. Read more

“The market has slowly gotten the message from the Fed,” said Jason Pride, chief investment officer for private wealth at Glenmede in Philadelphia.

“It’s likely that the Fed, with further rate hikes, will push the economy into a recession in order to bring inflation down,” Pride said. “We don’t think the markets have fully understood that.”

Data showed the number of Americans filing new claims for unemployment benefits rose more than expected last week, but the labor market remains tight even as demand begins to cool amid higher rates. students. Read more

Friday’s September Nonfarm Payrolls to Employment report will help investors gauge whether the Fed is changing its rate hike plans.

Money markets are pricing in an 83% chance of a fourth consecutive 75 basis point rate hike when policymakers meet on November 1-2.

The benchmark 10-year Treasury yield initially declined before hitting a one-week high. Ten of the 11 major S&P 500 sectors fell, led by a 2.9% decline in real estate (.SPLRCU).

Energy (.SPNY) was the lone gainer, up 1.8%.

Tesla Inc (TSLA.O) fell 0.2% as Apollo Global Management Inc (APO.N) and Sixth Street Partners, which sought to fund Elon Musk’s $44 billion Twitter deal, failed to are more in talks with the billionaire. Read more

Alphabet Inc (GOOGL.O) edged up 0.4% after the launch of Google’s new phones and its first smartwatch.

Oil prices rose, holding at three-week highs after the Organization of the Petroleum Exporting Countries and its allies agreed to cut production targets by 2 million barrels per day (bpd), the highest reduction since 2020. Find out more

As of 2:43 p.m. EDT, the Dow Jones Industrial Average (.DJI) fell 284.38 points, or 0.94%, to 29,989.49, the S&P 500 (.SPX) was down 27.85 points, or 0.74%, to 3,755.43 and the Nasdaq Composite (.IXIC) lost 42.38 points, or 0.38%, to 11,106.26.

Falling issues outnumbered rising ones on the NYSE by a ratio of 2.05 to 1; on the Nasdaq, a ratio of 1.34 to 1 favored the decliners.

The S&P 500 posted three new 52-week highs and 29 new lows; the Nasdaq Composite recorded 30 new highs and 97 new lows.

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Reporting by Herbert Lash in New York Additional reporting by Ankika Biswas and Shreyashi Sanyal in Bengaluru Editing by Arun Koyyur and Matthew Lewis

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