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U.S. stocks closed lower on Monday as investors struggled to regain their lost confidence from last week’s selloff as they continued to react to remarks from Fed Chair Jerome Powell, who said the central bank will not go soft on its rate-hike policy till it is able to fully check inflation. All three major indexes ended in negative territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) slid 0.6% or 184.41 points to close at 32,098.99 points. The blue-chip index had at one point declined 321 points before paring some of the losses.
The S&P 500 dropped 0.7% or 27.05 points to end at 4,030.61 points. Tech and real estate stocks were the biggest losers.
The Technology Select Sector SPDR (XLK) fell 1.3%, while the Real Estate Select Sector SPDR (XLRE) declined 0.9%. Ten of the 11 sectors of the benchmark index ended in negative territory. Energy stocks were the only gainers. The Energy Select Sector SPDR (XLE) advanced 1.5%.
The tech-heavy Nasdaq plunged 1% or 124.04 points to finish at 12,017.67 points.
The fear-gauge CBOE Volatility Index (VIX) was up 2.54% to 26.21. Decliners outnumbered advancers on the NYSE by a 2.91-to-1 ratio. On Nasdaq, a 2.20-to-1 ratio favored declining issues. A total of 9.36 billion shares were traded on Monday, lower than the last 20-session average of 10.59 billion.
Investors Worried About Steep Rate Hikes
Wall Street suffered its worst day in months on Friday, with the Dow plummeting over 1,000 points, while the S&P 500 gave up almost all its gains for August. The massive selloff came as Fed Chair Jerome Powell during his speech at the Kansas City Fed’s annual symposium at Jackson Hole, Wyo, made clear that the central bank would continue its inflation fight and will go for sharp rate hikes so long it doesn’t fully get control over soaring inflation.
This dashed investors’ hopes of a less steep rate hike, which many had been expecting, leading to a massive selloff. Investors are concerned that a steep rate hike will further slow economy’s growth.
Investors knew that more rate hikes were in the coming but they were divided between a 75-basis-point and 50-basis-point hike at Fed’s September meeting. A 75-basis-point hike is now almost assured in Fed’s next meeting.
These fears continued throughout Monday although a rebound looked possible for a brief period when the Dow and S&P 500 turned green. However, the positive sentiment was short-lived as growing concerns of an economic slowdown continued to unsettle investors.
Monday also saw the 2-year Treasury yield hitting a new 15-year high as rate hike fears continued to dent investors’ confidence. Tech stocks were once again the biggest casualties. Shares of Salesforce, Inc. (CRM - Free Report) declined 3.4%. Shares of Microsoft Corporation (MSFT - Free Report) and Intel Corporation (INTC - Free Report) fell 1.1% and 1.3%, respectively. Microsoft has a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
No economic data was released on Monday.
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Stock Market News for Aug 30, 2022
U.S. stocks closed lower on Monday as investors struggled to regain their lost confidence from last week’s selloff as they continued to react to remarks from Fed Chair Jerome Powell, who said the central bank will not go soft on its rate-hike policy till it is able to fully check inflation. All three major indexes ended in negative territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) slid 0.6% or 184.41 points to close at 32,098.99 points. The blue-chip index had at one point declined 321 points before paring some of the losses.
The S&P 500 dropped 0.7% or 27.05 points to end at 4,030.61 points. Tech and real estate stocks were the biggest losers.
The Technology Select Sector SPDR (XLK) fell 1.3%, while the Real Estate Select Sector SPDR (XLRE) declined 0.9%. Ten of the 11 sectors of the benchmark index ended in negative territory. Energy stocks were the only gainers. The Energy Select Sector SPDR (XLE) advanced 1.5%.
The tech-heavy Nasdaq plunged 1% or 124.04 points to finish at 12,017.67 points.
The fear-gauge CBOE Volatility Index (VIX) was up 2.54% to 26.21. Decliners outnumbered advancers on the NYSE by a 2.91-to-1 ratio. On Nasdaq, a 2.20-to-1 ratio favored declining issues. A total of 9.36 billion shares were traded on Monday, lower than the last 20-session average of 10.59 billion.
Investors Worried About Steep Rate Hikes
Wall Street suffered its worst day in months on Friday, with the Dow plummeting over 1,000 points, while the S&P 500 gave up almost all its gains for August. The massive selloff came as Fed Chair Jerome Powell during his speech at the Kansas City Fed’s annual symposium at Jackson Hole, Wyo, made clear that the central bank would continue its inflation fight and will go for sharp rate hikes so long it doesn’t fully get control over soaring inflation.
This dashed investors’ hopes of a less steep rate hike, which many had been expecting, leading to a massive selloff. Investors are concerned that a steep rate hike will further slow economy’s growth.
Investors knew that more rate hikes were in the coming but they were divided between a 75-basis-point and 50-basis-point hike at Fed’s September meeting. A 75-basis-point hike is now almost assured in Fed’s next meeting.
These fears continued throughout Monday although a rebound looked possible for a brief period when the Dow and S&P 500 turned green. However, the positive sentiment was short-lived as growing concerns of an economic slowdown continued to unsettle investors.
Monday also saw the 2-year Treasury yield hitting a new 15-year high as rate hike fears continued to dent investors’ confidence. Tech stocks were once again the biggest casualties. Shares of Salesforce, Inc. (CRM - Free Report) declined 3.4%. Shares of Microsoft Corporation (MSFT - Free Report) and Intel Corporation (INTC - Free Report) fell 1.1% and 1.3%, respectively. Microsoft has a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
No economic data was released on Monday.