US stock markets were mostly lower on Tuesday as fears the Federal Reserve could keep interest rates higher for an extended period and bank stocks tumble. The biggest headwind for the S&P 500 index was financials, down 0.8%. S&P’s downgrades of several US regional lenders, hurt bank stocks, with the KBW regional bank index down 2.4% and the S&P 500 bank index down 2.1%.
Investors will seek clarity on the rate outlook as Fed Chair Jerome Powell speaks at Friday’s Jackson Hole meeting. “Interest rates are rising again quite significantly, which weakens the shares somewhat”; said Peter Tuz, chairman of Chase Investment Counsel in Charlottesville, Virginia.
Benchmark 10-year Treasury yields hit 16-year highs on the belief that the Fed could keep rates higher for longer. The Dow Jones Industrial Average fell 170.34 points, or 0.49%, to 34,293. On Jan. 35, the S&P 500 fell 11.06 points, or 0.25%, to 4,388.71 and the Nasdaq Composite gained 13.79 points, or 0.1%, up to 13,511.38.
Investors also eagerly awaited Nvidia’s results and forecasts, which came out on Wednesday night. Its success story last quarter sparked a surge in tech stocks and artificial intelligence hopes. Nvidia shares hit an all-time high of $481.87 at the start, but the latter dropped by 2.8%. Midway through the decline, Macy’s was down 14 degrees. The department store chain warned of sluggish consumer spending during the crucial holiday shopping season.
Plunging issues outpace the NYSE rise from 1.34 to 1; on the Nasdaq, 1. The 38-to-1 ratio contributed to the decline. The S&P 500 Index posted 4 new 52-week highs and 12 new lows; The Nasdaq Composite posted 37 new highs and 196 new lows.