US stocks tumbled lower in a choppy post-labor day session on Tuesday as traders remained on their guard ahead of the Federal Reserve’s next policy move later this month.
The Standard & Poor’s 500 Index was down 0.4%, while the Dow Jones Industrial Average was down 0.5%, or about 170 points. The high-tech Nasdaq Composite led the declines, down 0.7%. The moves come after three consecutive weeks of losses for the major averages.
Losses resumed across stocks after new data showed US services activity gained momentum in August, signaling to investors that Federal Reserve officials may continue to raise interest rates by 75 basis points on September 21.
The Institute for Supply Management reported that its non-manufacturing PMI rose to a reading of 56.9 last month from 56.7 in July, the second consecutive monthly increase after a three-month decline.
Immediately after the results, the CME FedWatch tool reflected a new rise in the probability – a 74% chance – that the Fed will raise interest rates by another 0.75%.
Treasury yields soared as investors await the central bank’s next move. The benchmark 10-year note rose to 3.338%, while the two-year Treasury bond rose to 3.499%, its highest level since 2007.
In commodity markets, oil prices fell after a temporary rally following the first supply cut by OPEC+ in more than a year as the group works to manage global crude oil markets. West Texas Intermediate crude fell to $86.77 a barrel while Brent crude futures fell to $92.65 a barrel.
On the cryptocurrency front, Bitcoin (BTC-USD) fell back below the $20,000 level.
Bed Bath & Beyond (BBBY) by 18.4% on Tuesday. Last week, the home goods retailer announced in a strategic update that it was laying off employees and closing nearly 150 stores as part of a turnaround effort for its struggling business.
Reports emerged this weekend that the company’s chief financial officer, Gustavo Arnal Died by suicide on Friday afternoon After falling from a skyscraper in Tribeca, New York, known as the Jinja Tower. Before his death, Arnal was named in a $1.2 billion shareholder lawsuit alleging her involvement in a “pump and dump” scheme.
“The Company is in the early stages of evaluating the complaint but based on current knowledge, the Company believes the allegations are unfounded,” a spokesperson Bed Bath & Beyond told Yahoo Finance.
Acquisition of the digital worldDWACShares tumbled more than 11% after the special purpose takeover firm that was due to merge with former President Donald Trump’s social media platform failed to gain enough shareholder support to extend the deadline to complete the deal.
The moves come after the Labor Department released its latest monthly jobs report for August on Friday. The US economy added 315,000 jobs in the past as the unemployment rate rose to 3.7%, according to government data.
“The modest slowdown in August employment growth may be welcome by the Fed, but it will not prevent further significant rate hikes in the coming months,” Oxford Economics’s Nancy Vanden Houten and Kathy Bostancik said in a note on Friday. “Fed Chairman Powell clarified last week that the FOMC plans to push interest rates into a well-restricted area to reduce inflation and prevent unconstrained inflation expectations.”
Bank of America strategists led by Michael Hartnett warned Friday of a “rapid inflation shock” and a “slow recession shock,” as investors anticipate continued monetary policy tightening by the Federal Reserve.
Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter Tweet embed