Stock market: Wall Street closes lower, still in Fed wake

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MARKET OVERVIEW. The New York Stock Exchange ended slightly lower on Monday, still in the wake of Friday’s slowdown following Fed Chair Jerome Powell’s hawkish inflation statements.

Consult market news (again).

Stock market indices at close of trading

In Toronto, the S&P/TSX closed up 37.17 points (-0.19%) at 19,836.12 points.

In New York, the S&P500 fell 27.05 points (-0.67%) to 4,030.61 points.

the Nasdaq fell 124.04 points (-1.02%) to 12,017.67 points.

the DOW fell 184.41 points (-0.57%) to 32,098.99 points.

the loons up $0.0014 (+0.1783%) to $0.7686.

the oil rose $3.80 (+4.08%) to $96.86.

gold ended at $0.40 (+0.02%) at $1,750.20.

the Bitcoin rose $118.96 (+0.59%) to $20,159.36.

the context

“US stocks fell further after last week’s sharp decline, sparked by comments by Fed Chair Jerome Powell during his Jackson Hole speech,” Schwab analysts said.

“During the Fed symposium, Jerome Powell signaled that firms and households could ‘suffer’ if the central bank continues aggressive monetary policy and remains firmly committed to restoring price stability,” they said.

Wall Street erased all of its August gains on Friday after Jerome Powell flatly dashed hopes of Fed monetary easing in the near future in Jackson Hole, Wyoming.

“He seemed determined to use high interest rates and not cut them quickly in the future, even if it means hardship for households,” said Briefing.com’s Patrick O’Hare.

For the analyst: “Jerome Powell didn’t throw a glass of water in the face of Wall Street. He poured her a bucket of ice water!”

The idea of ​​future higher money costs with rising interest rates, which weighs on the financing prospects and results of companies, especially in the technology sector, weighed on the indices again, especially the Nasdaq.

Apple (AAPL) ended down 1.37%, Meta (FB) of 1.61% and Tesla (TSLA) by 1.14%.

The decline of the title of Customer Relations and Remote Computing Specialist Salesforce (CRM) (-3.04%) weighed on the Dow Jones, as did the lawsuit from 3M (-2.04%), which was embroiled in several lawsuits related to defective earplugs for the military.

overreaction?

But for Spartan Capital’s Peter Cardillo, “Friday’s negative reaction was overdone, although the market was still a bit nervous on Monday.”

“The Fed hasn’t actually said anything new, other than that it will continue to fight inflation. We had no indication of what kind of rise was planned for September,” the analyst told AFP, who thinks the market should be able to recover from these low levels.

Bond yields on 10-year Treasury bills, which move inversely with bond prices, rose sharply to 3.11%.

Two-year rates hit 3.46% this morning, the highest level since 2007.

The VIX index, which reflects market volatility, has started rising again since Friday, reaching its highest level since mid-July.

All S&P sectors except energy (+1.54%) and utilities such as power (+0.25%) traded lower on Monday.

Real estate (-0.87%), which was very sensitive to interest rate increases, and information technology (-1.28%) led to this decline.

The economic calendar remained bright on Monday as the earnings season draws to a close.

Still digesting comments from the Federal Reserve Chair, investors prepared to position themselves for the long-awaited macroeconomic report later in the week: the official US jobs numbers for August, which are due on Friday.

After July’s unexpected surge in job creations to over half a million, analysts expect August to see 300,000 new hires, a still solid figure.

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