Home Business Wall Street in red as Fed worries persist Reuters

Wall Street in red as Fed worries persist Reuters

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© Reuters. FILE PHOTO: A trader works on the trading floor of the New York Stock Exchange (NYSE) in Manhattan, New York, U.S., August 8, 2022. REUTERS/Andrew Kelly

Shruti Shankar and Carolina Mandl

NEW YORK (Reuters) – Wall Street’s main indexes fell in a volatile session on Tuesday as traders assessed fresh economic data after the U.S. Labor Day holiday.

The Institute for Supply Management (ISM) survey showed that the U.S. services industry expanded for a second month in a row in August amid stronger growth in orders and employment, while supply bottlenecks and price pressures eased.

However, numbers from S&P Global (NYSE: ) showed that the services sector PMI missed initial estimates for August.

Stronger-than-expected readings in the US services sector fueled expectations that the Federal Reserve will continue to raise interest rates to tame inflation.

“The Fed has driven us to a point where we’re very data-driven, so every piece of information that comes out is going to be looked at by investors not just at the absolute level, but what that means at the Fed meeting,” said Carol Schleif, deputy director of the Fed. by BMO Family Office Investments.

“One of the things that confuses investors is that there really isn’t much that can push the markets either up or down,” she added.

The Nasdaq technology index lost a seventh straight day, in what could be its longest losing streak since November 2016.

Price sensitive shares of Amazon.com Inc (NASDAQ: ) and Microsoft Corp (NASDAQ: ) fell more than 1% as benchmark U.S. Treasury yields rose to their highest levels since June. Apple Inc (NASDAQ: ), which will release new iPhones next Wednesday, fell nearly 1%.

Traders see a 74% chance of a third rate hike of 75 basis points at the Fed’s meeting later this month, according to CME’s FedWatch Tool https://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html?redirect =/trading/interest-rates/fed-funds.html.

Focus will be on Fed Chairman Jerome Powell’s speech on Thursday, as well as US consumer price data next week for clues on the path of monetary policy.

Markets started September on a weak note, extending a slide that began in late August, when dovish comments from Fed chiefs and data pointing to a buoyant US economy stoked fears of aggressive interest rate hikes.

The gauge closed at a six-week low on Friday as concerns over Europe’s gas crisis overshadowed relief from monthly jobs data that showed a slight easing of wage pressures. The index is down nearly 18% this year, while the Nasdaq is down nearly 26% as rising interest rates hurt tech and rising stocks.

Among the S&P’s major sectors, consumer discretionary and telecommunications fell the most, while defensive utilities and real estate rose.

As of 2:44 p.m. ET, it was down 160.03 points, or 0.51%, at 31,158.41; The S&P 500 lost 14.97 points, or 0.38%, to 3,909.29; and fell 77.97 points, or 0.67%, to 11,552.90.

The index, known as the Wall Street fear gauge, rose to 26.43 points.

Bed Bath & Beyond Inc (NASDAQ: ) fell 17.3% after Chief Financial Officer Gustavo Arnal fell to his death from New York’s Tribeca skyscraper.

Digital World Acquisition Corp tumbled 15.3% after Reuters reported that the blank check acquisition firm that agreed to merge with former US President Donald Trump’s social media company failed to garner enough shareholder support to renew the deal.

Declining issues outnumbered advancing ones on the NYSE by a ratio of 2.47 to 1; on the Nasdaq, a 2.03-to-1 ratio favored decliners.

The S&P 500 posted no new 52-week highs and 27 new lows; The Nasdaq Composite recorded 16 new highs and 282 new lows.

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