Stocks closed lower at Wall Street A major decision on interest rates is awaited by the Federal Reserve.
The Standard & Poor’s 500 It lost 43.61 points by 1.1% to 3,856.28 points Nasdaq Composite It lost 107.87 points, or 0.9 points, to 11,427.15 points. Industry average Dow Jones It fell 306.89 points, or 0.99%, to 30,712.79 points.
Treasury yields mostly rose. Customers are waiting to see How far will the Fed raise interest rates? At its meeting, which ends on Wednesday. The Federal Reserve raised the cost of borrowing money in hopes of curbing the highest rate of inflation in four decades.
Traders fear that the Federal Reserve will overshoot and slow the economy to such an extent that it leads to a recession.
“The market is preparing for the worst And you see a little bit of selling pressure,” said Paul Kim, managing director of Simplify ETFs.
The retailersValue technologyand companies healthy and the Banks They were among the heaviest weights on the market.
Bond yields mostly reach. The 10-year Treasury yield, which influences mortgage rates, rose to 3.56% from 3.52% late Monday and is trading at its highest since 2011.
Treasury yield for two years, which tends to follow Federal Reserve job outlookIt rose to 3.96% from 3.95% late Monday and is hovering around its highest since 2007.
Stocks fell and Treasury yields rose as the Federal Reserve raised the cost of borrowing money in hopes of doing so Curb inflation is the hottest in the past four decades. The large interest rate increases by the central bank have alarmed the markets, especially as Federal Reserve officials have confirmed their intention to continue raising interest rates until they are sure that inflation is under control.
Federal Reserve Chairman, Jerome PowellHe frankly warned in a speech last month that raising interest rates would “bring some pain”.
“He did his best to indicate that it would be another aggressive movementsaid Liz Young, SoFi’s Head of Investment Strategy. “It was as obvious as a bell what they focused on.”
The Fed is expected to raise the key short-term interest rate by Three quarters of a point by the third time at their meeting on Wednesday. This would raise its reference rate, which affects many loans to consumers and businesses, to a range of 3% to 3.25%, Highest level in 14 yearss and above zero at the beginning of the year.
Wall Street is worried that a rate hike will happen so far slowing economic growth and pushing the economy to a Recession. This concern has been heightened by data showing that the US economy is already slowing and business warnings about the impact of inflation and problems Suppliers in its operations.
The United States is not the only country experiencing high inflation or the impact of anti-price efforts.
central bank Sweden On Tuesday, it raised its key interest rate by one percentage point to 1.75%, taking everyone by surprise as it struggled to bring down inflation measured at 9% in August.
Consumer inflation in Japan It rose in August to 3%, its highest level since November 1991, but well below readings of 8% or more in the United States and Europe. The Bank of Japan will hold a two-day monetary policy meeting later this week, although analysts expect the central bank to maintain its easy monetary policy.
Decisions about interest rates NorwayAnd the Swiss and bank England the following.
Markets Europe Most fell, while those in Asia rose.
(With information from The Associated Press and Reuters)