The New York Stock Exchange ended sharply lower on Tuesday as economic data published during the day reinforced the hypothesis that the American Federal Reserve (Fed) may have to maintain high interest rates for a long period.
The Dow Jones index fell 1.29%, or 430.97 points, to 33,002.38 points.
The broader S&P-500 lost 58.94 points, or 1.37%, to 4,229.45 points.
The Nasdaq Composite fell 248.31 points (1.87%) to 13,059.47 points.
This is the lowest closing level for the S&P-500 since June 1, while the Dow Jones fell into the red over the year for the first time since June.
The CBOE volatility index, considered an indicator of the level of fear on Wall Street, has been at a peak since May 24.
Data released today showed that the number of job openings in the United States rebounded unexpectedly in August, highlighting the tension in the labor market, an element likely to encourage the Fed to continue its monetary tightening.
Investors are now awaiting the monthly report on employment in the United States, which is scheduled for publication on Friday.
They also continue to closely monitor the trajectory of bond yields, which have reached 16-year highs since the Fed’s last meeting on September 19-20.
Furthermore, the start of the quarterly results season is on the horizon, which some investors hope will bring good news for the market.
While most investors assumed in the past that the Fed “would need to lower rates in the short term,” they now see “a different scenario: high rates for a long time,” said Rick Meckler, partner at Cherry Lane Investments in New Jersey.
Higher borrowing costs are a burden on both businesses and consumers.
Atlanta Fed President Raphael Bostic said there was no urgency for the US central bank to raise interest rates again, but it was likely to wait ” a long time” for reducing rates to be appropriate.
Her counterpart in Cleveland, Loretta Mester, indicated that she was open to the idea of raising rates again, possibly as early as the next Fed meeting in November.
All the main sectors of the S&P-500, apart from utilities, ended the session in the red, notably technologies while high-growth stocks are among the most affected by the rise in bond yields.
On the stock side, Amazon and Microsoft fell after Reuters reported that the British media regulator, Ofcom, would call for an antitrust investigation against the two American giants for their dominant position in the British cloud computing market. .
2023-10-03 21:42:25
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