Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S. August 22, 2022. REUTERS/Brendan McDermid
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- US composite PMI at lowest since February 2021
- Zoom crashes on poor forecast
- Macy’s shares rise on earnings
- Indices: S&P 500 -0.14%, Nasdaq +0.19%, Dow -0.45%
August 23 (Reuters) – Wall Street collapsed on Tuesday as investors focused on data showing a slowdown in the economy ahead of a Federal Reserve meeting later this week in Jackson Hole, Wyoming.
The S&P 500 and Dow Jones Industrial Average declined after data showed that private sector operations in the United States contracted for a second straight month in August, with the service sector being particularly weak as demand faltered amid inflation and tightening financial conditions eased . Continue reading
The S&P Global Flash Composite Purchasing Managers Index (PMI) for August fell to 45 this month, its lowest level since February 2021, from a final reading of 47.7 in July. A reading below 50 indicates a contraction in activity.
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Eight of the 11 sector indexes in the S&P 500 declined, led by real estate (.SPLRCR) down 1.71%, followed by a 1.47% loss in healthcare (.SPXHC).
Stocks have fallen in recent sessions leading up to this week’s central bank meeting in Jackson Hole, where Fed Chair Jerome Powell is expected on Friday to reiterate his strong commitment to rooting out inflation, which is at a four-decade high.
Traders are divided between expectations of a 50 basis point hike and a 75 basis point hike by the central bank after several policymakers recently slammed expectations of a dovish turn and stressed the Fed’s commitment to fighting inflation. FEDWACH
“What we’ve seen over the past week is the realization that the Fed could still hike rates by 75 basis points in September,” said Jake Dollarhide, chief executive of Longbow Asset Management in Tulsa, Oklahoma. “The market fears that Powell will revert to a hawkish stance.”
The benchmark 10-year yield rose to its highest level since late July.
Zoom Video Communications Inc (ZM.O) plunged about 15% after the former stay-at-home stock favorite cut its annual earnings and revenue forecasts. Continue reading
After a bumpy start to the year, markets have rallied since mid-June on hopes inflation has peaked, but this summer rally faltered last week on renewed fears of aggressive Fed tightening.
In afternoon trade, the S&P 500 fell 0.14% to 4,132.39 points.
The Nasdaq was up 0.19% to 12,404.59 points, while the Dow Jones Industrial Average was down 0.45% to 32,915.83 points.
Wall Street’s busiest trades
The S&P 500 Energy Index <.SPNY> up 3.3%, tracking the rise in crude oil prices as tight supply came back into focus.
Macy’s Inc (MN) rose 3.2% after the retailer beat quarterly earnings estimates, while Palo Alto Networks Inc (PANW.O) surged 12% after the cybersecurity firm posted positive quarterly results and announced a stock split plan. Continue reading
In the US stock market (.AD.US), rising stocks outweighed falling ones by a ratio of 1.1:1.
The S&P 500 posted a new high and 30 new lows; The Nasdaq recorded 29 new highs and 133 new lows.
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Reporting by Bansari Mayur Kamdar and Devik Jain in Bengaluru and by Noel Randewich in Oakland, California. Editing by Marguerita Choy
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