Wall Street falls on inflation fears and interest rate hikes

  • Megacap growth stocks fall against higher yields
  • Oil prices add to inflation problems after OPEC+ production cut
  • Weekly jobless claims in the US increased more than expected
  • Indices down: Dow 0.70%, S&P 0.72%, Nasdaq 0.67%

Oct 6 (Reuters) – Wall Street’s main indexes fell on Thursday on concerns about continued inflation and the Federal Reserve’s interest rate hike cycle, while Tesla shares fell amid concerns about funding Elon Musk’s proposed purchase of Twitter.

Before pulling back, markets were briefly relieved by data showing an increase in weekly jobless claims as it likely raised the Fed’s hopes with its rapid rate hikes.

However, Minneapolis Fed President Neil Kashkari said the US central bank is “a long way” from being able to stop its aggressive rate hikes. Read more

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Data showed that the number of Americans filing new claims for unemployment benefits rose more than expected last week, but the labor market remains tight even as demand for labor slumps amid rising interest rates. Read more

After the report, the benchmark 10-year Treasury yield initially declined before gaining, weighing on price-sensitive growth stocks including Apple Inc and Meta Platforms Inc. (META.O)Amazon.com Inc (AMZN.O)and Nvidia Corp (NVDA.O).

Tesla Corporation (TSLA.O) Apollo Global Management Inc stock fell 1.9% (APO.N) And Sixth Street Partners, which was looking to secure funding for Musk’s $44 billion Twitter deal, is no longer in talks with the billionaire. Read more

Meanwhile, oil prices settled near three-week highs after the biggest supply cut by the OPEC+ group of countries since 2020 ahead of the European Union’s ban on Russian energy is set to tighten global oil supplies. Read more

“There is no doubt that the OPEC+ production cut is putting some upward pressure on oil prices and on prices at the pump, and that is very concerning,” said Hugh Johnson, chief economist at Hugh Johnson Economics in Albany, New York.

Everything except the energy sector (.SPNY) The index fell among the 11 major indexes of the S&P 500 sector.

At 10:24 a.m. ET, the Dow Jones Industrial Average (.DJI) The index fell 210.92 points, or 0.70%, to 30.062.95 Standard & Poor’s 500 (.SPX) The Nasdaq Composite Index fell 27.30 points, or 0.72%, to 3,755.98 (nineteenth) It was down 74.81 points, or 0.67%, at 11,073.83 points.

Wednesday’s data showed an increase in monthly employment by private employers in America and a rise in the ISM service industry employment gauge, indicating that the Federal Reserve will keep interest rates higher for a longer period. Read more Read more

Monthly non-farm payroll data and unemployment rate data, due out on Friday, will be on top of investors’ radar to assess the amount of Fed rate hikes in the future.

Money markets are pricing in a near 80% chance of a 75 basis point rate hike in a row at the November 1-2 Federal Reserve meeting.

Investors will also listen closely to comments about inflation and rate hikes from Fed officials including Cleveland Chair Loretta Meester, Fed Governor Lisa Cook, Board Governor Christopher Waller and Chicago President Charles Evans. Read more

Goldman Sachs said in a note that growing fears of a looming recession in corporate leadership are expected to affect capital spending and job openings.

Declining issues outnumbered advanced stocks by 2.68 to 1 on the New York Stock Exchange and by 1.66 to 1 on the Nasdaq.

The S&P recorded a 52-week high and 21 new lows, while the Nasdaq recorded 20 new highs and 50 new lows.

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Additional reporting by Ankika Biswas and Shreyachi Sanyal in Bengaluru; Editing by Aaron Coeur

Our criteria: Thomson Reuters Trust Principles.

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