Stock market news: Mixed stocks, residents of these states lower house prices, more oil, less gas
US stocks were mixed with the Dow in positive territory on Tuesday morning, while the Nasdaq and S&P 500 were significantly lower as investors continued to express fear of additional sharp interest rate hikes by the Federal Reserve.
Those fears are taking some of the wind out of this summer’s stock market rally.
The Dow Jones Industrial Average fell more than 600 points on Monday as investors awaited Fed Chairman Jerome Powell’s Friday speech in Jackson Hole, Va., in which he is expected to give an update on the central bank’s efforts to tackle inflation. .
Monday’s selloff followed four weeks of gains for the S&P 500 on Friday by US stocks. Markets climbed from July to mid-August on hopes that inflation had peaked, which would allow the Fed to soften its stance, as well as on generally stronger corporate earnings.
But Fed officials remained publicly flustered, leading some investors to conclude that the rebound was premature. The market outlook also remains highly uncertain as investors weigh positive news – such as strong job growth – against concerns that a Fed tightening could push the economy into recession.
“The market wants the Fed to voice its dovish approach, but the Fed isn’t there yet,” said Philipp Blancato, chief executive of Ladenburg Thalmann Asset Management. “The market got a little ahead of itself.”
On Monday, the Dow was down 643.13 points, or 1.9%, to close at 33063.61. The S&P 500 fell 90.49, or 2.1%, to 4137.99. The technology-focused Nasdaq Composite slipped 323.64, or 2.5%, to 12381.57.
Even with the recent volatility, all three major indices are up at least 5.8% over the past three months. The futures market shows traders are divided over whether the central bank will raise interest rates by half a percentage point or three-quarters at its next meeting in September.
Aggressive growth could cause businesses and consumers to cut spending, potentially hurting corporate income and economic growth.
“Jackson Hole is something that is starting to panic the market,” said Honey Redha, portfolio manager at Pinebridge Investments. He said that after the last Fed meeting, some investors expected it to ease rate hikes. “The chatter is that maybe Powell will try to reverse that perception,” he said.
Investors are also worried about a key number to be released Friday: the Commerce Department’s personal-consumption-spending index, a measure of core inflation that does not include volatile food and energy costs. The index is seen as the Fed’s preferred measure of inflation and can influence Powell’s calculations.
Meanwhile, Asian stocks fell mostly on Tuesday.
Benchmarks in Asia fell in Tokyo, Sydney, Seoul and Hong Kong, but were little changed in Shanghai.
The latest market slide comes as investors grapple with uncertainty about when the highest inflation in decades will drop significantly, how much the Fed will have to raise interest rates to bring it under control, and how much rate hikes will slow the economy.
Japan’s benchmark Nikkei 225 fell 1.2% to 28,454.45 in afternoon trade. Australia’s S&P/ASX 200 fell 1.1% to close at 6,971.10. South Korea’s Kospi fell 1.1% to end at 2,435.26. Hong Kong’s Hang Seng fell 0.8% to 19,509.56, while the Shanghai Composite gained less than 0.1% to 3,278.64.