Stocks fall widely in afternoon trading on Wall Street
A currency trader looks at monitors in front of screens showing the Korea Composite Stock Price Index (KOSPI), left, and the exchange rate of the South Korean won to the US dollar in the foreign exchange trading room of the headquarters of KEB Hana Bank in Seoul, South Korea, Monday Aug. 22, 2022. Asian stock markets were mixed on Monday after China lowered an interest rate that affects mortgage lending as investors eagerly awaited the Federal Reserve conference this week for signals on further possible US rate hikes to calm soaring inflation. (AP Photo/Ahn Young-joon)
PA
Stocks fell sharply on Monday afternoon on Wall Street, extending market losses amid worries about inflation and the way forward for the economy.
The S&P 500 fell 2% at 1:39 p.m. EST, and more than 90% of stocks in the benchmark posted losses. He finished in the red last week, snapping a four-game winning streak.
The Dow Jones Industrial Average fell 614 points, or 1.8%, to 33,096 and the Nasdaq fell 2.4%.
Tech companies and retailers suffered some of the heaviest losses. Microsoft fell 2.8% and Target 3.1%.
Movie theater operators have been unsettled following a report that Cineworld is considering filing for Chapter 11 bankruptcy protection. The industry is still struggling to recover from the virus pandemic. AMC Entertainment rose 1.3% after rebounding from an earlier plunge in trading. Cinemark fell 3.3%.
Market brights included Signify Health, which jumped 32.2% after the Wall Street Journal reported that Amazon would make a bid for the company.
Bond yields gained ground. The 10-year Treasury yield rose to 3.03% from 2.97% on Friday night.
The broader market losses follow a week-long rally. Investors are trying to figure out where the economy is going from here, as stubbornly high inflation is hurting businesses and consumers. Record inflation is also prompting investors to focus on central banks and their efforts to combat high prices without further hurting economic growth.
“You’ve had quite a rally and there’s reason not to know where we go from here,” said Tom Martin, senior portfolio manager at Globalt Investments. “There is still decent potential for a recession.”
Last week’s minutes from the July Federal Reserve board meeting confirmed plans for further rate hikes despite signs of weaker economic activity. Traders fear that aggressive measures to slow the economy could go too far and cause a recession. The US economy has already contracted in the first half of 2022 and Wall Street will get more information on Thursday when the government releases an updated report on the US economy for the second quarter.
Investors are also eagerly awaiting this week’s Federal Reserve conference for signals on further possible rate hikes in the United States to calm runaway inflation. The central bank is holding its annual meeting Thursday in Jackson Hole, Wyoming. Fed Chairman Jerome Powell is scheduled to deliver a speech Friday morning.
The Fed is holding its meeting after a busy week of economic and corporate data that showed inflation continues to weigh on the economy, but consumer spending remains resilient. Falling gasoline and food prices, for wheat and corn, have helped alleviate some of this pressure. This essentially contributed to curbing the rise in inflation in July, even if prices remain stubbornly high.
“I don’t think we’re out of the woods yet on inflation,” Martin said. “We still don’t really know how inflation is going to evolve and what the Fed is going to do.”
