(Reuters) – Wall Street ended lower on Tuesday, with the S&P 500 extending its losing streak to four sessions, as volatile investors worried about the Federal Reserve’s interest rate hike and increased talk of a looming recession.
Meta Platforms Inc (META.O) Markets fell, with shares falling 6.8% after reports that EU regulators have ruled that a company should not require users to consent to personalized ads based on their digital activity.
However, tech names generally struggled as investors used caution toward high-growth companies that will perform sluggishly in a challenging economy. Apple company (AAPL.O)Amazon.com Inc (AMZN.O) and Alphabet Inc (GOOGL.O) It fell between 2.5% and 3%, while the Nasdaq fell for the third consecutive session.
Most of S&P’s 11 major sectors declined, with energy services and telecoms (.SPLRCL) Join the technology (.SPLRCT) as neglected leaders. services (.SPLRCU)a defensive sector often favored during times of economic uncertainty, was the lone exception, gaining 0.7%.
The outlook for future economic growth was in focus on Tuesday after comments from financial giants pointed to uncertain times ahead.
Bank of America Corp (BAC.N) CEO forecast three quarters of moderate negative growth next year, while JP Morgan Chase & Co (JPM.N) Chief Executive Jamie Dimon said that inflation will reduce the spending power of consumers and that a moderate to more pronounced recession is likely.
Their comments follow recent views from BlackRock and others who believe the US Federal Reserve’s aggressive monetary tightening to combat stubbornly high prices could trigger an economic downturn in 2023.
“The market is very reactive right now,” said David Sadkin, president of Bel Air Investment Advisors.
He noted that while markets traditionally reflected the future, they now move up and down based on the latest headlines.
Concerns about economic growth come amid a reassessment by traders of the path an interest rate hike will take in the future, following strong data on jobs and the services sector in recent days.
Money market bets point to a 91% chance that the US central bank will raise interest rates by 50 basis points at the policy meeting scheduled for December 13-14, and rates are expected to peak at 4.98% in May 2023, up from an estimated 4.92%. On Monday, before the release of service sector data.
The S&P 500 rose 13.8% in October and November on hopes of lower interest rate hikes and better-than-expected earnings, though the Fed’s outlook could be undermined by more data, including producer prices due on Friday.
“The market got ahead of itself at the end of November, but then we got some good economic data, so people are reassessing what the Fed is going to do next week,” said Sadkin of Bel Air.
Dow Jones Industrial Average (.DJI) It fell 350.76 points, or 1.03%, to close at 33,596.34, the Standard & Poor’s 500. (.SPX) It lost 57.58 points, or 1.44%, to close at 3,941.26 points and the Nasdaq Composite (nineteenth) It decreased by 225.05 points, or 2%, to close at 11,014.89 points.
Tensions over the direction of global growth also weighed on oil prices, with US crude falling to levels last seen in January, before Russia’s invasion of Ukraine disrupted supply markets. energy sector (.SPNY) It fell 2.7 percent on Tuesday.
Banks are among the stocks most sensitive to an economic downturn, as they are likely to face negative effects from bad loans or slowing loan growth. Standard & Poor’s Banking Index (.SPXBK) It fell 1.4 percent to its lowest closing level since Oct. 21.
Trading volume on US exchanges reached 11.01 billion shares, in line with the full-session average over the last 20 trading days.
The S&P 500 posted three new highs in 52 weeks and nine new lows; The Nasdaq Composite recorded 52 new highs and 262 new lows.
Additional reporting by Devik Jain, Anika Biswas and Johan M Cherian in Bengaluru and David French in New York; Editing by Vinay Dwivedi, Shonak Dasgupta and Lisa Shumaker
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