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U.S. stocks closed lower on Tuesday as oil prices and bond yield rose yet again, while investors geared up for a hawkish stance from the Fed officials ahead of their interest rate decision on Wednesday. All three major indexes ended in negative territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) shed 0.3% or 106.57 points to end at 34,517.73 points.
The S&P 500 declined 0.2% or 9.58 points, to close at 4,443.95 points. Consumer discretionary and utility stocks were the worst performers.
The Consumer Discretionary Select Sector SPDR (XLY) and the Utilities Select Sector SPDR (XLU) each declined 0.5%. Ten of the 11 sectors of the benchmark index ended in negative territory.
The tech-heavy Nasdaq slipped 0.2% or 32.05 points to finish at 13,678.19 points.
The fear-gauge CBOE Volatility Index (VIX) was up 0.79% to 14.11. A total of 9.60 billion shares were traded on Tuesday, lower than the last 20-session average of 10.05 billion. Decliners outnumbered advancers on the NYSE by a 1.67-to-1 ratio. On the Nasdaq, a 1.47-to-1 ratio favored declining issues.
Investors Jittery Ahead of Fed’s Interest Rate Decision
Investors have been eagerly waiting for the Fed’s interest rate hike decision at the end of its September meeting which started on Tuesday. The decision will be announced on Wednesday. Ahead of that, investors tried to gauge the central bank’s future course of action.
Although investors are hopeful that the Federal Reserve will keep interest rates unchanged this month, they are worrying about the accompanying economic forecasts and the central bank’s future course of action.
Market participants believe that the Fed will maintain a hawkish stance amid increasing inflationary pressures, which has been a growing concern lately that has seen the 10-year Treasury yield climb to its highest level since 2007.
Concerns over rising inflation have grown once again owing to the surge in oil and gas prices, which can become the most important determinant of expectations about consumer inflation.
The growing concerns led to a huge selloff on Tuesday, with all three major indexes closing in the red. Shares of Deere & Company ((DE - Free Report) ) fell 3%, while Caterpillar Inc. ((CAT - Free Report) ) declined 0.5%. Caterpillar carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
Economic Data
In economic data released on Tuesday, housing starts declined 11.3% in August to its lowest level since July 2020, following a 2% rise in July. However, building permits increased 6.9% in August.
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Stock Market News for Sep 20, 2023
U.S. stocks closed lower on Tuesday as oil prices and bond yield rose yet again, while investors geared up for a hawkish stance from the Fed officials ahead of their interest rate decision on Wednesday. All three major indexes ended in negative territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) shed 0.3% or 106.57 points to end at 34,517.73 points.
The S&P 500 declined 0.2% or 9.58 points, to close at 4,443.95 points. Consumer discretionary and utility stocks were the worst performers.
The Consumer Discretionary Select Sector SPDR (XLY) and the Utilities Select Sector SPDR (XLU) each declined 0.5%. Ten of the 11 sectors of the benchmark index ended in negative territory.
The tech-heavy Nasdaq slipped 0.2% or 32.05 points to finish at 13,678.19 points.
The fear-gauge CBOE Volatility Index (VIX) was up 0.79% to 14.11. A total of 9.60 billion shares were traded on Tuesday, lower than the last 20-session average of 10.05 billion. Decliners outnumbered advancers on the NYSE by a 1.67-to-1 ratio. On the Nasdaq, a 1.47-to-1 ratio favored declining issues.
Investors Jittery Ahead of Fed’s Interest Rate Decision
Investors have been eagerly waiting for the Fed’s interest rate hike decision at the end of its September meeting which started on Tuesday. The decision will be announced on Wednesday. Ahead of that, investors tried to gauge the central bank’s future course of action.
Although investors are hopeful that the Federal Reserve will keep interest rates unchanged this month, they are worrying about the accompanying economic forecasts and the central bank’s future course of action.
Market participants believe that the Fed will maintain a hawkish stance amid increasing inflationary pressures, which has been a growing concern lately that has seen the 10-year Treasury yield climb to its highest level since 2007.
Concerns over rising inflation have grown once again owing to the surge in oil and gas prices, which can become the most important determinant of expectations about consumer inflation.
The growing concerns led to a huge selloff on Tuesday, with all three major indexes closing in the red. Shares of Deere & Company ((DE - Free Report) ) fell 3%, while Caterpillar Inc. ((CAT - Free Report) ) declined 0.5%. Caterpillar carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
Economic Data
In economic data released on Tuesday, housing starts declined 11.3% in August to its lowest level since July 2020, following a 2% rise in July. However, building permits increased 6.9% in August.