Close to the day’s lows on Wall Street

Wall Street’s major indexes closed Tuesday’s session near lows, with the Dow Jones Industrial Average losing more than 400 points amid heightened concern over a resurgence of tensions in US-China relations following Nancy Pelosi’s visit to the U.S. Taiwan.

At the same time, today’s statements from senior Federal Reserve officials dashed hopes that had been built for a more dovish stance by the Fed in coming months to protect the economy.

Cleveland Fed chief Loretta Mester warned today that the Federal Reserve still has work to do on rate hikes as inflation hasn’t even peaked.

“We have more work to do because we haven’t seen that change in inflation yet,” Mester said in an interview with the Washington Post. “It should be sustainable evidence, for a few months, that inflation has peaked – we haven’t even seen that – and is coming down,” he added.

Earlier Chicago Fed chief Charles Evans said the Fed could raise interest rates by 50 basis points at its next policy meeting in September if inflation does not improve, while a 75 basis point increase is also on the table.

“If anybody really thinks it’s not getting better … 50 (bps) is a reasonable assessment, but 75 might be OK. I don’t think anything higher is needed,” Evans told reporters on the sidelines of an event. at the bank’s offices in Chicago.

The Fed’s aggressive policy-tightening strategy has fueled concerns about the risk of the economy slipping into recession, with investors hoping the central bank will then slow rate hikes to avoid that risk.

Indicators – Statistics

On the board, the Dow Jones fell 402.23 points, or -1.23%, to close at 32,396.17, while the S&P 500 fell 27.44 points, or -0.67%, to 4,091.19. The tech Nasdaq lost 20.22 points, or -0.16%, to 12,348.76.

Of the 30 stocks that make up the Dow Jones industrial index, only four closed with a positive sign and 26 with a negative. Salesforce was the biggest gainer, up $0.81, or 0.44%, to $183.79, followed by Travelers, up $156.71, up 0.58%, and Walmart, up 0.00%. .11% to $132.68.

Biggest losers today were Caterpillar (-5.82%), Boeing (-3.42%) and Intel (-2.57%).

Meanwhile, investors continue to monitor the progress of House Speaker Nancy Pelosi’s visit to Taiwan, which China considers a Chinese province.

Pelosi is the highest-ranking US elected official to visit the island in 25 years. The speaker of the House of Representatives heads a special congressional mission to the Indo-Pacific region, with visits to Singapore, Malaysia, South Korea and Japan.

Beijing reacted angrily, warning of “severe consequences” and announcing military high schools shortly after Pelosi’s arrival on the island. The exercises will include joint air and sea exercises in the north, southwest, northeast of Taiwan, long-range firing in the Taiwan Strait and missile tests in the sea area east of Taiwan.

The new confrontation between the world’s two largest economies is heightening investor concerns about the risk of further escalation of tension with unpredictable consequences for the global economy.