Yahoo Finance Stock Market News for Aug 31, 2022
U.S. stocks ended lower for the third straight session on Tuesday as strong jobs data further fueled fears that the Fed would continue with its aggressive interest rate hikes in a bid to combat surging inflation even if that negatively impacts economic growth. All three major indexes ended in negative territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) declined 1% or 308.12 points to close at 31,790.87 points.
The S&P 500 fell 1.1% or 44.45 points to finish at 3,986.16 points. Energy and materials stocks were the biggest losers.
The Energy Select Sector SPDR (XLE) declined 3.4%, while the Materials Select Sector SPDR (XLB) declined 1.6%. All 11 sectors of the benchmark index ended in negative territory.
The tech-heavy Nasdaq tumbled 1.1% or 134.53 points to end at 11,883.14 points.
The fear-gauge CBOE Volatility Index (VIX) rose for the third straight session to reach 27.69. Decliners outnumbered advancers on the NYSE by a 4.27-to-1 ratio. On Nasdaq, a 2.44-to-1 ratio favored declining issues. A total of 10.51 billion shares were traded on Tuesday, lower than the last 20-session average of 10.54 billion.
Rate Hike Worries Grow
Markets started with small gains on Tuesday after taking a massive beating in the earlier two sessions that started after Fed Chair Jerome Powell made clear on Friday that the central bank would continue with its steep rate-hike stance in order to combat inflation even if that means short-term pain for the people.
This dashed investors’ hopes of a less steep rate hike in September as they were expecting after July inflation data showed that prices remained unchanged from June, signaling that inflation may have peaked. However, inflation is still at multi-year highs and Powell made the Fed’s point clear that there are no immediate chances of the central bank softening its monetary policy.
Markets were somewhat trying to recuperate from the jolt suffered over the past two days but fresh economic data showed U.S. job openings rose to 11.2 million in July. This once again ignited fears that the Fed now has one more solid reason to go for a steep rate hike, resulting in the rebound to soon losing steam.
The Dow and Nasdaq have now given up more than 50% of the gains made since the mid-June lows. Also, on Tuesday, all three benchmark indexes closed below their 50-day moving average for the first time since July.
Energy stocks were the biggest losers on Tuesday, with shares of Chevron Corporation CVX declining 2.4%. Shares of Exxon Mobil Corporation XOM declined 3.8%. Exxon Mobil has a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Economic Data
Economic data released on Tuesday showed U.S. job openings jumped to 11.2 million in July, up from 11 million in June.
In a separate report, the Conference Board said that Consumer Confidence rose to 103.2 in August from July’s reading of 95.3, increasing for the first time in four months.
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