Wall St falls for 3rd consecutive session on concerns over Fed rate hikes

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

Aug 30 (Reuters) – U.S. stocks tumbled for the third straight session on Tuesday as rising job offers fueled fears the U.S. Federal Reserve has another reason to maintain its aggressive rate-hike path. interest in fighting 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 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

“It’s fueling a strong job market, it also shows no apparent consumer concern, and it goes against what the market is really looking for,” said Andre Bakhos, managing member of Ingenium Analytics LLC at Plainsboro, New Jersey.

“One would normally interpret that as good news, however, we have the inflation part that is the concern and those types of numbers don’t work well in trying to bring inflation down, at least that’s the market perception.”

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

The Dow Jones Industrial Average (.DJI) fell 327.54 points, or 1.02%, to 31,771.45, the S&P 500 (.SPX) lost 49.12 points, or 1.22%, to 3,981.49 and the Nasdaq Composite (.IXIC) fell 173.88 points, or 1.45%, to 11,843.79.

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.

However, Atlanta Fed Chairman Raphael Bostic said in an essay published Tuesday that the Fed could “roll back” its recent streak of 75 basis point hikes if new data shows that inflation is “clearly” slowing as Richmond Fed President Thomas Barkin said the Fed’s commitment. bringing inflation back to its 2% target will 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.

Each of the 11 sectors of the S&P 500 was in negative territory, the energy sector (.SPNY) down 3.27% as oil prices fell more than 5% on fears that slowing global economies could sap demand. Read more

The benchmark 10-year Treasury yield erased early morning losses to trade at 3.119%.

Growth of rate-sensitive megacaps and tech stocks such as Microsoft Corp (MSFT.O)down 1.32%, and Apple Inc (AAPL.O)of 1.69%, were the main drags on the benchmark index.

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.

The CBOE Volatility Index, also known as the Wall Street Fear Gauge, rose for the third consecutive session and last traded at 26.92 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)however, rose 2.25%, the biggest gainer in the S&P 500 after reporting a smaller-than-expected drop in comparable quarterly sales on the back of steep discounts. Read more

Falling issues outnumbered rising ones on the NYSE by a ratio of 4.83 to 1; on the Nasdaq, a ratio of 2.92 to 1 favored the decliners.

The S&P 500 posted no new 52-week highs and 18 new lows; the Nasdaq Composite recorded 7 new highs and 196 new lows.

Reporting by Chuck Mikolajczak; Editing by David Gregorio

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