Wall Street closes down on Tuesday as investors predict on data showing a slow economy ahead of a gathering of the US Federal Reserve later this week in Jackson Hole, Wyoming.
The S&P 500 fell after the data showed that private sector business activities in the United States were contracted for the second month in a row in August, with special tenderness in the service sector because demand weakened in the face of inflation and tighter financial conditions.
S&P Global (NYSE: SPGI) Flash Composite Purchasing Managers Index, or PMI, for August dropped to 45, the lowest since February 2021, from 47.7 in July. Reading below 50 shows contractions in activity.
The shares decreased during the last sessions before the central bank gathering this week at Jackson Hole, where the president of the Fed, Jerome Powell, should strengthen a strong commitment to eliminating inflation operating at four decades.
Traders are divided between expecting an increase of 50 basis points and an increase of 75 bps by the central bank after several new policymakers push back to the expectations of a dovish axis and emphasize the Fed’s commitment to fighting against inflation.
“What we have seen in the past week is the awareness that the Fed can still increase interest rates by 75 basis points in September,” said Jake Dollarhide, executive head of Longbow Asset Management in Tulsa, Oklahoma. “Market is worried that Powell will return to hawkish attitude.”
The 10 -year benchmark yield results have risen to the highest level since the end of July.
On the indices of the S&P 500 S&P sector, seven decreased, mentioned by real estate, down 1.46%, followed by a loss of 1.39% in health care.
After the start of the year, the markets have rallied since mid-June on the hope that inflation has reached its peak, but that summer rally broke last week due to fears renewed around a tightening route Aggressive monetary policy by the Fed.
The S&P 500 decreased by 0.22% to end the session at 4,128.73 points.
The NASDAQ was unchanged at 12,381.30 points, while the industrial average of Dow Jones decreased by 0.47% to 32,909.59 points.
The S&P 500 energy index rose 3.6%, tracking the jumping price of crude oil because the tight supply returned to focus.
The S&P 500 has posted one new top and 30 new lows; the NASDAQ recorded 45 new highs and 150 new lows.
The volume on American exchanges was relatively light, with 9.4 billion shares negotiated, compared to an average of 10.9 billion shares during the 20 previous sessions. Wall Street closes down as investors predict a slow economy