The major indexes on Wall Street fell on Tuesday as a sharp increase in job openings fueled concerns about the Federal Reserve’s aggressive approach to lowering inflation.
Since Fed Chair Jerome Powell reaffirmed the central bank’s determination to raise interest rates despite a slowing economy last week, the benchmark S&P 500 index has fallen 4.6%.
Traders increased their bets on a third consecutive 75 basis point increase in September to 76.5% from 70% prior to the release of job openings data.
Meanwhile, labor demand showed no signs of abating, with data showing that job openings in the United States increased to 11.239 million in July.
All eyes are now on Friday’s non-farm payroll report.
“Markets are so focused on the Fed that a strong jobs report on Friday will likely frighten some investors. Goldilocks is desperately needed here, “said Jeff Buchbinder, LPL Financial’s chief equity strategist.
“Stocks could rise slightly between now and the end of the year, but in the short term, we would expect quite a bit of choppiness as the market gathers more information on the Fed’s and interest rate outlook.”
All S&P 500 sectors were in the red. The 10-year Treasury yield recovered early morning losses to trade at 3.11%.
Rate-sensitive megacap growth and technology stocks fell between 0.6% and 1.1%, including Microsoft Corp, Apple Inc, and Nvidia Corp.
The Dow Jones Industrial Average was down 184.94 points, or 0.58%, at 31,914.05, the S&P 500 was down 28.81 points, or 0.71%, at 4,001.80, and the Nasdaq Composite was down 86.17 points, or 0.72%, at 11,931.50 at 10:24 a.m. ET.
The CBOE Volatility Index, also known as Wall Street’s fear gauge, rose for the third consecutive session, closing at 26.41 points.
To add to the worry, Taiwan’s military fired warning shots at a Chinese drone that buzzed a Taiwanese-controlled islet near the Chinese coast.
Best Buy Co rose 4.6% after reporting a smaller-than-expected drop in quarterly comparable sales, as steep discounts helped soften the blow from rampant inflation to electronics demand.
Twitter Inc fell 1% after Tesla Inc CEO Elon Musk issued an additional notice to terminate the $44 billion acquisition of the social media company.
Declining issues outnumbered advancing issues by a ratio of 2.55-to-1 on the NYSE and 1.90-to-1 on the Nasdaq.
The S&P 500 had no new 52-week highs and ten new lows, while the Nasdaq had six new highs and 102 new lows.
