Wall Street falls for the third consecutive session on concerns about Fed rate hike

A trader works at the New York Stock Exchange (NYSE) in New York City, US, August 29, 2022. REUTERS/Brendan McDermid

Aug 30 (Reuters) – U.S. stocks fell for a third consecutive session on Tuesday as rising job opportunities raised concerns that the U.S. Federal Reserve had another reason to keep its aggressive course of raising interest rates to combat inflation.

Standard S&P 500 Index (.SPX) It has fallen more than 5% since Federal Reserve Chairman Jerome Powell on Friday confirmed the central bank’s intention to raise interest rates even in the face of a slowing economy. Read more

Job demand showed no signs of slowing as US job opportunities rose to 11.239 million in July and the previous month was sharply revised upwards. A separate report showed that consumer confidence rebounded strongly in August after three consecutive monthly declines. Read more

“It fuels a strong job market, and it also signals a clear lack of concern from consumers, and that goes against what the market is really looking for,” said Andre Bakhos, managing director at Ingenium Analytics LLC in Plainsboro, New Jersey.

“One would usually interpret this as good news, however, we have the inflation part that is the concern and these kinds of numbers don’t play very well with trying to bring down inflation, at least that’s the perception of the market.”

The data adds to the focus on August non-farm payrolls due on Friday.

Dow Jones Industrial Average (.DJI) It fell 327.54 points, or 1.02%, to 3,1771.45 Standard & Poor’s 500 (.SPX) It lost 49.12 points, or 1.22%, to 3981.49 points, and the Nasdaq Composite (nineteenth) It fell 173.88 points, or 1.45%, to 11,843.79 points.

New York Fed President John Williams said Tuesday that the central bank will likely need to get the rate at 3.5% and is unlikely to cut rates at all next year as it fights inflation.

However, Atlanta Fed President Rafael Bostic said in an article published on Tuesday that the Fed could “roll back” from its recent streak of 75 basis points if new data shows inflation is slowing “clearly” while the Richmond Bank chief said Fed’s Thomas Barkin The Fed’s pledge to bring 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 rate hike of 75 basis points at the September Federal Reserve meeting.

Each of the 11 S&P 500 sectors was in negative territory, with the energy sector (.SPNY) 3.27% with oil prices down more than 5% amid concerns that slowing global economies could dampen demand. Read more

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

Huge price-sensitive capital growth and technology stocks like Microsoft Corp (MSFT.O)down 1.32%, Apple (AAPL.O)of 1.69%, was the biggest pressure on the benchmark index.

The S&P 500 and Nasdaq both broke below the 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 major technical indicator that analysts are watching as support.

The CBOE Volatility Index, also known as the Wall Street Fear Scale, rose for the third consecutive session and was last trading at 26.92 points.

Adding to fears, the Taiwanese military fired warning shots at a Chinese drone that flew over a small island controlled by Taiwan near the Chinese coast. Read more

Best Buying Company (BBY.N)Still, up 2.25%, it’s the biggest gainer on the S&P 500 after reporting a smaller-than-expected drop in comparable quarterly sales thanks to steep discounts. Read more

Low issues outnumbered advanced issues on the New York Stock Exchange by 4.83 to 1; On the Nasdaq, the ratio was 2.92 to 1 in favor of declining stocks.

S&P 500 not hit 52-week highs and 18 new lows; Nasdaq Composite recorded 7 new highs and 196 new lows.

(This story is being reworked to fix the title, add a dropped word)

(Reporting by Chuck Mikolajchak) Editing by David Gregorio

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