Wall Street closes lower for the third consecutive session on worries about Fed rate hike

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  • Best Buy’s sales beat estimates because discounts stimulate demand
  • Job openings in July rose sharply
  • All 11 S&P sectors fell
  • Dow Jones down 0.96%, S&P 500 down 1.10%, Nasdaq down 1.12%

NEW YORK (Reuters) – U.S. stocks closed lower for a third consecutive session on Tuesday as rising job opportunities raised concerns that the U.S. Federal Reserve had another reason to maintain its assertive course to raise 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

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“They have to weaken the labor market and how they are going to do that — they are going to put pressure on prices and make things so expensive that people are going to back off, demand is going to drop, and people are going to take advantage of it,” said Ken Polkari, managing partner at Kace Capital Advisors in Boca Raton, Florida.

“It traps them further afield.”

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

Dow Jones Industrial Average (.DJI) The Standard & Poor’s 500 Index fell 308.12 points, or 0.96%, to 31,790.87 points (.SPX) It lost 44.45 points, or 1.10%, to 3,986.16 points and the Nasdaq Composite (nineteenth) It fell 134.53 points, or 1.12%, to 11,883.14 points.

New York Fed President John Williams said on 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. Read more

However, Atlanta Fed President Rafael Bostick 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”. Richmond Fed President Thomas Barkin said the Fed’s pledge to bring inflation back to its 2% target would 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.

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

Each of the 11 S&P 500 sectors was in negative territory, with the energy sector (.SPNY) It fell 3.36%, the biggest loser in percentage terms, as oil prices settled down more than 5% on concerns that slowing global economies could dampen demand. Read more

Huge price-sensitive capital growth and technology stocks like Microsoft Corp (MSFT.O)down 0.85%, and Apple Inc (AAPL.O)of 1.53%, is among the biggest pullbacks on the benchmark.

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.

SPX Technology

The CBOE Volatility Index, also known as Wall Street’s fear gauge, rose for the third consecutive session and reached a six-week high of 27.69 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) It rose 1.61% as one of the top gainers on the S&P 500 after it reported a smaller-than-expected drop in comparable quarterly sales thanks to steep discounts. Read more

Volume on US exchanges was 10.51 billion shares, compared to an average of 10.54 billion shares for the full session over the last 20 trading days.

Low issues outnumbered advanced issues on the New York Stock Exchange by 4.27 to 1; On the Nasdaq, the ratio was 2.44 to 1 in favor of declining stocks.

S&P 500 not hit 52-week highs and 18 new lows; The Nasdaq recorded 15 new highs and 217 new lows.

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(Reporting by Chuck Mikolajchak) Editing by David Gregorio

Our criteria: Thomson Reuters Trust Principles.

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