Wall Street Starts the Week With More Losses

Tech, healthcare stocks slumped
By Newser Editors and Wire Services
Posted Aug 29, 2022 3:40 PM CDT
Wall Street Starts the Week With More Losses
Traders work on the floor at the New York Stock Exchange.   (AP Photo/Seth Wenig, File)

Stocks closed lower on Wall Street Monday, adding to their recent losses as traders realized how determined the Federal Reserve is to keep interest rates high to fight inflation. The S&P 500 fell 27.05 points, or 0.7%, to 4,030.61. Technology companies were the biggest drag on the index. The Dow Jones Industrial Average fell 184.41 points, or 0.6%, to 32,098.99. The Nasdaq fell 124.04 points, or 1%, to 12,017.67. This week, investors will get more updates on the economy including the government’s monthly jobs report on Friday and a reading on consumer confidence Tuesday from the Conference Board.

Health care stocks also lost ground. Drug delivery technology company Catalent slumped 7.5% after giving investors a disappointing revenue forecast. Energy stocks made gains as US crude oil prices rose 4.2%. Exxon Mobil rose 2.3%. The market is coming off its worst weekly pullback since mid-June after Fed chief Jerome Powell indicated on Friday that the central bank will raise rates into next year and keep them elevated as it tries to quell demand and bring down prices for goods and services, the AP reports.

The open-endedness implied by how long the Fed may have to keep raising rates has, for now, quieted speculation on Wall Street that recent data showing more moderate inflation would prompt the central bank to act less aggressively. "We’re in this period where you’re going to see volatility be more of the norm versus the exception and will probably continue until, frankly, inflation gets under control and that then sets the motion for the Fed to become a little bit more dovish," says Terry Sandven, chief equity strategist at US Bank Wealth Management. The Fed’s last two hikes have been by 0.75 points, and Wall Street is expecting a third such increase in September, according to CME Group. (More stock market stories.)

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