Wall Street’s main indexes closed sharply lower on Tuesday despite an early rally, with the market still reeling from fears sparked by Federal Reserve Chairman Jerome Powell’s hawkish speech on Friday. for inflation.
The Fed chairman used his speech at the Jackson Hole economic symposium on Friday to reaffirm that the bank’s top priority is to get inflation under control, even if that means more pain for American businesses and households.
Strong data out today on consumer confidence and the labor market did little to improve sentiment as investors worry the Fed may need to act even more aggressively as the economy cools down as it tries to rein in inflation.
The data showed that consumer confidence strengthened, while jobs in the economy also increased.
In particular, the consumer confidence index climbed to 103.2 points in August from 95.7 points the previous month, easily beating the average estimate of analysts in a Wall Street Journal poll that placed the index at 97.4 points.
At the same time, job openings climbed to 11.2 million in July from 11 million the previous month.
Indicators – Statistics
On the board, the Dow Jones lost 308.12 points, or -0.96%, to close at 31,790.87, while the S&P 500 fell 44.45 points, or -1.10%, to 3,986.16.
In the last three sessions the industrial Dow has lost a total of 1,500 points.
The tech Nasdaq fell 134.53 points, or -1.12%, to 11,883.14.
Of the 30 stocks that make up the Dow Jones industrial index, only two closed with a positive sign and 28 with a negative. American Express was the biggest gainer with gains of $0.12 or 0.08% to $154.66, followed by JPMorgan Chase at $114.41 with a marginal increase of 0.02%.
The biggest losers were the Dow (-2.82%), Caterpillar (-2.52%) and Chevron (-2.44%).
Wall Street’s big losses do not seem to worry the executives of the central bank, as the latest statements of the president of the Minneapolis Federal Reserve Bank, Neel Kashkari, showed.
“I was actually pleased to see how Powell’s speech in Jackson Hole was received … the world now understands the seriousness of our commitment to get inflation back to 2 percent,” Kashkari said in a Bloomberg interview on Monday.
For his part, New York Federal Reserve Bank President John Williams said on Tuesday that the central bank would likely need to raise interest rates above 3.5% to put downward pressure on inflation and drive demand to better levels than the limited offer.
In the rest of the day, data released today from the real estate market showed that price growth continued to slow over the summer.
Specifically, the S&P CoreLogic Case-Shiller price index for 20 U.S. metropolitan areas rose 18.6% year-over-year in June, up from a 20.5% annual gain the previous month.
On a monthly basis, the index rose 0.4% in June, following a 1.3% rise in May.
In business developments, shares of Twitter lost 1.8% after Elon Musk sent a letter to the company formally informing it that he was ending the deal for the acquisition.
Best Buy also rose 1.6% after reporting its latest quarterly results that showed profit and revenue fell less than expected as they got a boost from stronger online sales.
Source: Capital
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