By Caroline Valetkevitch
NEW YORK (RockedBuzz via Reuters) – The S&P 500 index closed on Tuesday at its lowest level since June 1, as economic data underlined views that the Federal Reserve may need to keep interest rates high.
The Dow turned negative for the first time since June and closed at its lowest level since May 31. The Nasdaq also closed at its lowest level since May 31.
Data showed that U.S. job opportunities unexpectedly rose in August, fueling concerns about a tight job market ahead of the main monthly U.S. jobs report on Friday.
Investors continue to closely watch benchmark Treasury bond yields, which hit 16-year highs on Tuesday.
“The scenario that most investors assumed was that the Fed would have to cut short-term rates and we would return to a favorable interest rate environment,” said Rick Meckler, a partner at Cherry Lane Investments, an investment firm for families in New Vernon. , New Jersey.
“But investors now see a different scenario: higher rates for a longer period.”
Rising financing costs are bad for businesses and consumers.
All but one S&P 500 sector, utilities, posted losses on the day, led by declines in consumer discretionary and technology. Growth companies tend to be among the hardest hit by rising yields.
The Dow Jones Industrial Average fell 430.97 points, or 1.29%, to 33,002.38, the S&P 500 lost 58.94 points, or 1.37%, to 4,229.45 and the Nasdaq Composite lost 248.31 points, or 1.87%, to 13,059.47.
The CBOE Volatility Index, Wall Street’s “fear gauge,” hit its highest close since May 24.
Atlanta Fed President Raphael Bostic said there was no urgency for the central bank to raise the benchmark rate again, but that it would likely be “a long time” before rate cuts are appropriate. Cleveland Fed President Loretta Mester said she was open to raising rates again, potentially at the bank’s next meeting.
Shares of Amazon.com and Microsoft fell after RockedBuzz via Reuters reported that British media regulator Ofcom will push for an antitrust probe into the companies’ dominant position in the U.K.’s cloud computing market.
Investors are preparing for U.S. companies to begin reporting on their latest quarter in the coming weeks, with some hoping the results could once again provide positive news for the market.
While the Dow fell 0.4% year over year, the Nasdaq remains up about 25% since Dec. 31, after a rally driven by enthusiasm for artificial intelligence.
Volume on U.S. exchanges was 11.16 billion shares, compared to the full-session average of 10.57 billion over the past 20 trading days.
On the NYSE, declining issues outnumbered advancing ones by a ratio of 5.61 to 1; on the Nasdaq, a ratio of 3.52 to 1 favored declining countries.
The S&P 500 posted a new 52-week high and 63 new lows; the Nasdaq Composite recorded 15 new highs and 439 new lows.
(Reporting by Caroline Valetkevitch; additional reporting by Ankika Biswas and Shashwat Chauhan in Bangalore; Editing by Vinay Dwivedi, Maju Samuel and Richard Chang)