Dow closes lower Wednesday to end 5-day win streak, Wall Street mulls new retail data

Stocks fell on Wednesday as the rally on Wall Street that has driven prices higher since mid-June appeared to peter out as traders weighed the latest retail data and Federal Reserve minutes.

The Dow Jones Industrial Average fell 171 points, or 0.5%, while the S&P 500 and Nasdaq Composite fell 0.69% and 1.15%, respectively.

Equities have been volatile as traders rated the last minuteswhich showed that the Federal Reserve would continue its aggressive bull run until it could get inflation under control.

“Participants continued to anticipate that continued increases in the target range of the federal funds rate would be appropriate to achieve the Committee’s objectives,” the minutes read. “With inflation remaining well above the Committee’s target, participants felt that the shift to a restrictive policy stance was necessary to meet the Committee’s legislative mandate to promote maximum employment and price stability. “

At the same time, the central bank also signaled that it may slow the speed of its tightening soon, while acknowledging the dire state of the economy and the risk of slowing GDP growth.

“Participants felt that as the monetary policy stance tightens further, it would likely become appropriate at some point to slow the pace of policy rate increases while assessing the effects of cumulative policy adjustments on the ‘economic activity and inflation,’ the minutes read.

Meanwhile, traders continued to comb through corporate profits in the retail sector that started Tuesday with Walmart and Home Depot. Target shares slipped after the retailer posted profits that far exceeded expectations as it struggles with excess inventory, while Lowe’s trades higher despite a mixed quarter.

Retail sales data released Wednesday remains unchanged in July among decline in auto sales and gasoline priceseven though consumers have increased their online spending.

“No surprise to see the market take a breather after the summer rally it has been following,” said Chris Larkin, managing director of trading at E-Trade Financial. “…The market is waiting for any signs that a slowdown in rate hikes, which apparently fueled the recent rise, is ahead. Investors should remain nimble and continue to expect volatility as we don’t we may not be out of the woods yet.”

Obligation yields also increased Wednesday, with 10-year Treasury bond latest increase of more than 6 basis points to 2.88% as recession fears and uncertainty over the Fed’s rate hike path continued. The move sent growth stocks like technology plummeting.

Wednesday’s moves came after the Dow posted its fifth straight day of gains.

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