Wall Street fell for the fourth day in a row on worries about the Fed’s rate hike

  • Weekly jobless claims fall in the US
  • Slowing growth of the service industry
  • Qualcomm and Roku fell due to poor expectations
  • Dow Jones down 0.46%, Standard & Poor’s 500 down 1.06%, Nasdaq down 1.73%

NEW YORK (Reuters) – U.S. stocks closed lower for a fourth consecutive session on Thursday as economic data did little to change expectations that the Federal Reserve would keep raising interest rates for longer than previously thought.

After the Fed’s statement on Wednesday, comments from Federal Reserve Chair Jerome Powell that it was “too early” to consider pausing interest rates, sent stocks lower as US bond yields and the US dollar rose, a pattern that extended into Thursday.

Thursday’s economic data showed that the labor market remained strong, although a separate report showed growth in the service sector slowed in October, keeping the Fed on course to raise interest rates.

Unemployment Claims and Challenger Gray

“Years ago, the Fed’s job was to get rid of the giant pot, and that balance was always a very difficult turnaround, you want the economy to slow down to prevent inflation from getting out of control, but you want enough profits to support stock prices,” Rick said. Meckler, partner at Cherry Lane Investments in New Vernon, New Jersey.

“It is as much about the rate of change as it is about the rate of change, so when the rate of change starts to slow… that almost becomes a positive although we will continue to see higher rates in absolute terms, higher rates means more competition for stocks and lower multiples.”

The Dow Jones Industrial Average fell 146.51 points, or 0.46%, to 32001.25 points, the Standard & Poor’s 500 lost 39.8 points, or 1.06%, to 3719.89 points, and the Nasdaq Composite Index fell 181.86 points, or 1.73%, to 10342.94.

While traders are roughly evenly split between the odds of a 50 basis point and 75 basis point rate hike in December, the peak of the fed funds rate is seen rising to at least 5%, compared to the previous view of a rise to the 4.50-4.75% range .

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, US, October 14, 2022. REUTERS/Brendan McDermid

Investors will closely watch Friday’s non-farm payrolls report for signs that the Fed’s rate hike is starting to have a noticeable impact on the slowing economy.

The increase in revenue affected growth giants such as Apple Inc (AAPL.O), which fell by 4.24%, and Alphabet Inc (GOOGL.O), which lost 4.07% and caused a decline in technology (.SPLRCT) and communications services (.SPLRCL) She is the worst performer of the session.

Losses on the Dow were capped by gains in industries including Boeing (BA.N), which rose 6.34%, and a 2.20% increase in heavy equipment maker Caterpillar (CAT.N).

Qualcomm Inc (QCOM.O) and Roku Inc (ROKU.O) fell 7.66% and 4.57%, respectively, after forecasts for the holiday quarter fell short of expectations. Read more

With nearly 80% of S&P 500 companies reporting earnings, the expected growth rate is 4.7%, according to Refinitiv data, up slightly from 4.5% at the beginning of October.

Volume on US exchanges was 11.81 billion shares, compared to an average of 11.63 billion shares for the full session over the last 20 trading days.

Low issues outnumbered advanced issues on the New York Stock Exchange by 1.75 to 1; On the Nasdaq, the ratio was 1.50 to 1 in favor of declining stocks.

S&P 500 posted 6 new 52-week highs and 46 new lows; The Nasdaq Composite recorded 77 new highs and 291 new lows.

(Reporting by Chuck Mikolajchak in New York; Editing by Matthew Lewis

Our Standards: Thomson Reuters Trust Principles.

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