Wall Street records its third consecutive quarterly loss with rising inflation and a looming recession

NEW YORK (Reuters) – The Standard & Poor’s 500 Index on Friday closed its biggest September drop in two decades, crossing the finish line of a turbulent quarter filled with historically hot inflation, rising interest rates and recession fears.

The three major indices veered to a sharply lower end, after pulling back a brief rally early in the session.

The S&P and Dow posted their third consecutive weekly decline, and all three indices posted their second consecutive monthly losses.

In the first nine months of 2022, Wall Street suffered three consecutive quarterly declines, the longest losing streak for the S&P and Nasdaq since 2008 and the longest quarterly decline for the Dow in seven years.

“It’s another ugly day to end an ugly quarter in what looks like a very ugly year,” said Ryan Detrick, chief market strategist at The Carson Group in Omaha, Nebraska. “Investors will look back and realize that this was the year the Fed pulled a total of 180 on their views on inflation and quickly became incredibly hawkish.”

The Federal Reserve shook the markets by engaging in a series of relentless interest rate increases for decades in order to rein in high inflation, which has many market participants looking to key economic data for signs of a looming recession.

“The realization that the Fed is doing whatever it can to combat 40-year high inflation has investors worried that they will push the economy over the edge and into a recession,” Detrick added.

The Commerce Department’s personal consumption expenditures (PCE) report did little to assuage those concerns, showing that while consumers continue to spend, the prices they pay have accelerated, drifting further beyond the Fed’s inflation target and all but the guarantee of tight monetary policy by the central bank. It will last longer than investors had hoped.

Recession fears have also been echoed by dire warnings from Nike Inc (NKE.N) and cruise operator Carnival Corp (CCL.N), both citing inflation-related margin pressures. Read more Read more

The company’s shares fell 12.8% and 23.3%, respectively.

Dow Jones Industrial Average (.DJI) It fell 500.1 points, or 1.71%, to 28,725.51 points. Standard & Poor’s 500 (.SPX) It lost 54.85 points, or 1.51%, to 3,585.62 points. And the Nasdaq (nineteenth) It fell 161.89 points, or 1.51%, to 10575.62 points.

Among the 11 major sectors in the S&P 500, real estate (.SPLRCR) He was the only winner while the utilities were (.SPLRCU) Technique (.SPLRCT) suffered the largest percentage of losses.

Apple company (AAPL.O)Microsoft Corp, Amazon.com and Nike were the heaviest.

Corporate earnings reports for the quarter ending with a closing bell on Friday will start to drop in a few weeks, and analysts’ expectations are headed lower.

Analysts now see annual S&P 500 earnings growth of 4.5%, overall, down from an estimate of 11.1% at the start of the quarter.

Quarterly reallocations and so-called “window adjustments” likely contributed to the session’s volatility.

Low issues outnumbered advanced issues on the New York Stock Exchange by 1.45 to 1; On the Nasdaq, the ratio was 1.38 to 1 in favor of declining stocks.

S&P 500 hits no new 52-week highs and 93 new lows; The Nasdaq recorded 27 new highs and 380 new lows.

Volume on US stock exchanges was 12.44 billion shares, compared to an average of 11.45 billion over the last 20 trading days.

Stephen Kolb reports. Additional reporting by Ankika Biswas and Shreyachi Sanyal in Bengaluru; Editing by Jonathan Otis

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