Wall Street ends August with a whimper on Fed worry

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  • Snap jumps as it restructures advertising business and lays off staff
  • Bed Bath & Beyond sinks in corporate overhaul
  • The biggest PCT drop in August for the Dow, S&P 500 and Nasdaq since 2015
  • Dow down 0.88%, S&P 500 down 0.78%, Nasdaq down 0.56%

NEW YORK, Aug 31 (Reuters) – U.S. stocks ended the month with their fourth consecutive daily decline on Wednesday, cementing the weakest August performance in seven years, as concerns over aggressive interest rate hikes by the Federal Reserve persist.

The decline of technology has added to the pressure (.SPLRCT) sector, and more particularly chip manufacturers (.SOX)after Seagate’s soft forecast (STX.O) and HP Inc.

All three major indexes suffered their biggest monthly percentage declines in August since 2015. After hitting a four-month high in mid-August, the S&P 500 has stumbled in recent weeks, falling more than 8% to Wednesday’s close and falling through several close calls. technical support levels.

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Selling pressure accelerated after Fed Chairman Jerome Powell’s hawkish remarks on Friday about keeping monetary policy tight “for a while” dashed hopes of interest rate hikes. more modest interest, with the benchmark down more than 5% in the past four trading sessions.

“All (Powell) cares about is bringing inflation down and raising rates to do that, and in terms of how aggressively that all has to be determined from the data,” Tim said. Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York. York, New York.

“Right now we’re in this back and forth market, with a lot of volatility, concerns that the rally we had was just a bear market rally, probably concern that we were going back down to higher new lows.”

Cleveland Federal Reserve Chair Loretta Mester said Wednesday that the central bank will need to raise interest rates to just above 4% by early next year and hold them there in order to bring inflation back to the Fed’s target, and that the risks of recession over the next year or two have increased. Read more

The Dow Jones Industrial Average (.DJI) fell 280.44 points, or 0.88%, to 31,510.43; the S&P 500 (.SPX) lost 31.16 points, or 0.78%, to 3,955; and the Nasdaq Composite (.IXIC) fell 66.93 points, or 0.56%, to 11,816.20.

For the month, the Dow Jones fell 4.06%, the S&P 500 lost 4.24% and the Nasdaq fell 4.64%.

Adding to investor jitters, stocks are also heading into a historically weak period for the market in September.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., August 22, 2022. REUTERS/Brendan McDermid

“September is usually the worst month of the year; it and February are the only ones to show average declines, but September is the only month of the year to fall more than it rises, so it could end up being a kind of self-fulfilling prophecy,” said Sam Stovall, chief investment strategist at CFRA in New York.

Data earlier in the day showed ADP’s private payroll rose by 132,000 jobs in August, below economists’ forecast for job growth of 288,000, according to a Reuters poll. However, the report was suspended for June and July as the methodology was revised following a poor track record of synchronization with the government payroll report. Read more

Employment data from the Labor Department is due Friday and is expected to show nonfarm payrolls rose 300,000 last month after posting a 528,000 increase in July. Another strong report is likely to further cement expectations that the Fed will continue its outsized rate hikes after three consecutive 75 basis point increases.

The Philadelphia SE Semiconductor Index (.SOX) fell 1.15% after Seagate, down 3.54%, cut its first-quarter profit expectations, citing macro concerns that are forcing cloud computing companies and PC makers to cut inventory levels . Read more

Additionally, HP Inc fell 7.68% after forecasting pessimistic quarterly and annual earnings on slowing PC sales.

Snap inc. (SNAP.N)rose 8.69% after announcing it would cut 20% of its workforce, restructure its advertising sales unit and close some projects to focus on improving Snapchat sales and user numbers. Read more

Chewy Inc fell 8.18% after the online pet supplies retailer slashed its full-year 2022 sales outlook.

Bed Bath and Beyond Inc (BBBY.O) plunged 21.30% after announcing it would close 150 stores, cut jobs and revamp its merchandising strategy in a bid to turn around its loss-making business. Read more

Falling issues outnumbered rising ones on the NYSE by a ratio of 2.44 to 1; on the Nasdaq, a ratio of 1.32 to 1 favored the decliners.

The S&P 500 posted no new 52-week highs and 14 new lows; the Nasdaq Composite recorded 16 new highs and 190 new lows.

Volume on U.S. exchanges was 11.16 billion shares, compared to an average of 10.52 billion for the full session over the past 20 trading days.

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Reporting by Chuck Mikolajczak; edited by Jonathan Oatis

Our standards: The Thomson Reuters Trust Principles.

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