| symbol | Price | change | %Change |
|---|---|---|---|
| Me: DJI | $33,706.74 | -.292.30 | -0.86 |
| SP500 | $4,228.48 | -55.26 | -1.29 |
| I: COMP | $12,705.22 | -,260.13 | -2.01 |
US stocks traded lower early Monday morning as investors expressed concerns about future Fed action.
Traders are concerned that aggressive rate hikes by the Fed and central banks in Europe and Asia this year to stem inflation, which is at multi-decade highs, could hurt global economic growth.
“The Fed is still feeling inflation. His actions have not even begun to ease inflationary pressures at all,” ACY Securities’ Clifford Bennett said in a report. “They haven’t even started to restrict economic activity at all. The economic slowdown was already at play for other reasons.”
US stocks fell on Friday, ending the week lower and posting a four-week margin for the S&P 500 as investors questioned how aggressively the Federal Reserve must act to tame inflation.
The market went through a series of choppy moves as traders reassessed their bets on what the Fed might do at its September meeting. Many investors have been optimistic for weeks that inflation may have peaked and the central bank would moderate the magnitude of its future rate hikes.
But comments from central bank officials in recent days, coupled with the release of minutes from July’s Fed meeting, have put the possibility of continued aggressive rate hikes back into focus.
On Thursday, Federal Reserve Bank of St. Louis President James Bullard said he would lean towards a 0.75 percentage point hike in September.
“This feels like a reassessment of whether there has been enough financial tightening,” said John Roe, head of multi-asset funds at Legal & General Investment Management. “And if it doesn’t, could we get more pain from central banks doing more?”
The S&P 500 fell 55.26 points, or 1.3%, to 4228.48 and was down 1.2% for the week. The Dow Jones Industrial Average fell 292.30 points, or 0.9%, to 33706.74, down 0.2% for the week. The Nasdaq Composite fell 260.13 points, or 2%, to 12705.22 and is down 2.6% for the week.
Technology stocks have had some of the biggest losses. Microsoft fell 1.4%.
Retailers, banks and communications companies also fell. Next week, central bankers will gather in Jackson Hole, Wyoming, for the Federal Reserve Bank of Kansas City’s annual economic policy symposium.
Traders will be watching officials’ speeches closely for insight into the Fed’s mindset.
Meanwhile, Shanghai rose after the People’s Bank of China lowered its target interest rate on a five-year loan to shore up weak home sales. Tokyo, Hong Kong, Seoul and Sydney withdrew.
The Shanghai Composite Index rose 0.5% to 3,272.89, while Tokyo’s Nikkei 225 fell 0.5% to 28,794.79. Hong Kong’s Hang Seng lost less than 0.2% to 19,743.12. South Korea’s Kospi slipped 1.2% to 2,462.03 and Sydney’s S&P ASX-200 fell 0.9% to 7,051.70. India’s Sensex opened up 1.1%, falling to 58,992.24. New Zealand and Singapore advanced while Bangkok and Jakarta declined.