Dow loses nearly 300 points as fears of more Fed rate hikes hurt stocks: live updates

Stock markets sold off on Wednesday and the weak start to September continued as fears grew that the Federal Reserve might not complete its rate hike.
The Dow Jones Industrial Average dropped by 270 points, equivalent to a 0.8% decline. The S&P 500 fell 1% and the Nasdaq Composite lost 1.3%.
Government bond yields have risen, putting a new strain on risky assets. The yield on two-year government bonds rose more than 6 basis points to levels above 5%.

Technology stocks underperformed under interest rate pressures. Laggards were Nvidia and Tesla, down more than 3.5%. Apple lost around 3%, which was reflected in the Dow index. Amgen and Boeing contributed to the losses, which slipped more than 1.5%. The rise in government bond yields on Wednesday coincided with better-than-expected economic data, raising some concerns about the likelihood of further rate hikes. Recent data from the US economy’s services and manufacturing sectors shows that prices are moving in the wrong direction.

The latest updates regarding ISM’s situation have heightened worries that have persisted in the stock market for weeks: rising yields are slowly eroding stock prices, strong economic growth alongside higher inflation rates keeps applying pressure on the Federal Reserve, and the potential for a thriving oil-driven economic surge introduces an additional layer of intricacy,” stated Adam Crisafulli from Vital Knowledge in a Wednesday press release.

The price component of the ISM index for services rose 2.1 percentage points to 58.9% in August, the highest percentage of companies to show gains in four months.
This follows a five-level price component of the ISM manufacturing index.8 points at 48.4%. While readings below 50% mark a fall in the ISM survey, a large monthly rise represents a reversal of the recent trend. The price component rose slightly more than expected, further fueling fears of a rate hike.

According to the services report, the probability of the Federal Reserve raising interest rates in November has risen to 49, according to data from the CME Group. Traders estimate there is a 91% chance that the central bank will hold interest rates at its meeting later this month. As constant reports of a potential economic shift continue to surround us, I believe that with each wave of discouraging financial updates, anxiety about the looming possibility of a recession intensifies,” remarked the CEO. Sam Stovall, Director of Research Investments at CFRA.

Earlier in the day, Boston Fed Chair Susan Collins said the central bank “can play it safe”; for further rate hikes, but noted that “further tightening would be warranted”; Depends on the data. Oil prices rose again on Wednesday to their highest level since November, as Saudi Arabia and Russia extended voluntary supply cuts.

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