Key Wall Street indices slipped on Tuesday as a stronger-than-expected US services sector spurred hopes the Federal Reserve would continue raising interest rates to tame inflation.
The tech-heavy Nasdaq was set for its seventh consecutive day of losses in what could be the longest such loss since November 2016.
Rate-sensitive shares of Apple, Amazon.com Inc and Microsoft Corp fell nearly a percentage point each as the benchmark US Treasury yield hit its highest level since June.
“The primary concern for almost everyone is really what’s going to happen to the Fed and interest rates,” said Randy Frederick, vice president of business and derivatives for Charles Schwab in Austin, Texas.
“While the Fed will certainly continue to raise its interest rates, I think there is zero question about that. The only question is how much and how fast.”
A survey by the Institute for Supply Management (ISM) showed that the US services industry lifted for the second straight month in August amid strong order growth and employment, while supply constraints and price pressure eased.
However, data from S&P Global shows that the services sector PMI is lower than August’s flash estimates.
Traders see a roughly 75% chance of a third 75-basis-point rate hike at the Fed’s policy meeting later this month.
The focus will be on US consumer price data, along with Fed Chairman Jerome Powell’s speech on Thursday for clues on the path to monetary policy.
September started on a weak note as sharp comments from Fed policymakers and data signal momentum in the US economy raised fears of aggressive interest rate hikes.
The benchmark S&P 500 closed at a six-week low on Friday, as concerns over the European gas crisis eased monthly jobs data, which pointed to a slight easing of wage pressure. The index is down about 18% so far this year, while the Nasdaq is down about 26% as rising interest rates hurt megacap technology and growth stocks.
Among the key S&P sectors, consumer discretionary and communications services declined the most, while defensive utilities and real estate increased.
At 12:17 p.m. ET, the Dow Jones Industrial Average was down 104.63 points, or 0.33%, at 31,213.81, the S&P 500 was down 9.49 points, or 0.24%, at 3,914.77, and the Nasdaq Composite was down 49.39 points, or 0.42. %, at 11,581.47.
The CBOE Volatility Index, also known as Wall Street’s fear gauge, rose to 26.5 points.
Bed Bath & Beyond Inc fell 16.6% after the death of Chief Financial Officer Gustavo Arenal from New York’s Tribeca skyscraper.
Digital World Acquisition Corp fell 16.3% after Reuters reported the blank-check acquisition firm, which agreed to merge with Donald Trump’s social media company, has enough shareholder support for expansion to complete the deal. failed to achieve.
Issues decline in the number of advances to a 1.91-to-1 ratio on the NYSE and 1.72-to-1 ratio on the Nasdaq.
The S&P index recorded no new 52-week highs and 22 new lows, while the Nasdaq recorded 16 new highs and 253 new lows.
This story has been published without modification in text from a wire agency feed.
catch all business News, market news, today’s fresh news events and breaking news Updates on Live Mint. download mint news app To get daily market updates.