Wall Street in the red as Fed fears persist

A trader works on the trading floor of the New York Stock Exchange (NYSE) in Manhattan, New York City, US, August 8, 2022. REUTERS/Andrew Kelly

(Reuters) – Wall Street’s main indexes fell on Tuesday as a stronger-than-expected US service sector reading fueled expectations that the Federal Reserve would continue to raise interest rates to tame inflation.

Nasdaq high tech (nineteenth) It is set for the seventh consecutive day of losses in what could be the longest losing streak since November 2016.

Price-sensitive stocks of Apple, Amazon.com Inc (AMZN.O) and Microsoft Corporation (MSFT.O) Each fell about 1 percent as US Treasury yields rose to their highest levels since June.

“The primary concern, by far, for just about everyone, is what will happen with the Fed and interest rates,” said Randy Frederick, vice president of trading and derivatives at Charles Schwab in Austin, Texas.

“While the Fed will certainly continue to raise rates, I think there is absolutely no question about that. The only question is to what extent and at what speed.”

A survey from the Institute of Supply Management (ISM) showed that the US service industry rebounded in August for the second month in a row amid stronger demand and employment growth, while supply bottlenecks and price pressures eased. Read more

However, figures from S&P Global showed that the services sector PMI did not live up to the flash estimates for August.

Traders see a 75% chance of a 75 basis point rate hike at the Federal Reserve’s monetary policy meeting later this month.

The focus will be on Federal Reserve Chairman Jerome Powell’s speech on Thursday as well as US consumer price data next week for clues on the direction of monetary policy.

Markets started in September on a weak note as upbeat comments from Fed policy makers and data pointing to momentum in the US economy sparked fears of higher interest rates.

S&P 500 . Standard (.SPX) It closed at a six-week low on Friday as concerns over the European gas crisis overshadowed relief from monthly jobs data, which indicated a slight easing of wage pressures. The index is down nearly 18% so far this year, while the Nasdaq is down about 26% as rising interest rates hurt tech giants and growth stocks.

Among the major S&P segments, consumer appreciation (.SPLRCD) and communication services (.SPLRCL) Fell over, while the defensive facilities (.SPLRCU) and real estate (.SPLRCR) Has risen.

At 12:17 p.m. ET, the Dow Jones Industrial Average (.DJI) It was down 104.63 points, or 0.33%, to 31,213.81 Standard & Poor’s 500 (.SPX) The index fell 9.49 points, or 0.24%, to 3,914.77 points, and the Nasdaq Composite Index (nineteenth) It was down 49.39 points, or 0.42%, to 11,581.47 points.

CBOE Volatility Index (.VIX)also known as the Wall Street Fear Scale, rose to 26.5 points.

Bed Bath and Beyond Inc (BBBY.O) It fell 16.6% after CFO Gustavo Arnal fell to his death from the Tribeca skyscraper in New York. Read more

Digital World Acquisition Company (DWAC.O) It fell 16.3% after Reuters reported that the white-check acquisition company that agreed to merge with Donald Trump’s social media company failed to get enough shareholder support to extend the deal. Read more

Declining issues outnumbered advanced stocks by 1.91 to 1 on the New York Stock Exchange and 1.72 to 1 on the Nasdaq.

The S&P 500 did not hit 52-week highs and 22 new lows, while the Nasdaq hit 16 new highs and 253 new lows.

Additional reporting by Sruthi Shankar and Ankika Biswas in Bengaluru; Edited by Somiadb Chakrabarti and Magu Samuel

Our criteria: Thomson Reuters Trust Principles.