© Reuters. A trader works on the floor of the New York Stock Exchange (NYSE) in New York City, US, Aug. 29, 2022. REUTERS/Brendan McDermid
By Devik Jain and Sruthi Shankar
(Reuters) – Wall Street’s major indices fell for the third straight session on Tuesday, as a sharp rise in job openings fueled concerns about the US Federal Reserve’s aggressive approach to curb inflation.
The benchmark is down 5% since Fed Chair Jerome Powell last week reaffirmed the central bank’s determination to raise interest rates despite a slowing economy.
Labor demand showed no signs of slowing down as US job openings rose to 11.239 million in July, while a separate report showed consumer confidence rebounded sharply in August after three consecutive monthly declines.
All eyes are now on Friday’s August nonfarm wage data.
“Normally, it’s a good thing to see companies looking to hire more employees… more jobs is a reason for the Fed to raise interest rates,” Bryce Doty, senior portfolio manager at Sit Investment Associates, said in a note.
New York Fed President John Williams said on Tuesday that he believes the central bank will raise its key rate high enough to curb growth and curb inflation, and then have to maintain it until the end of 2023.
Traders estimate a 70.5% chance of a third consecutive 75 basis point rate hike in September.
All sectors of the S&P 500 traded in the red, with the energy sector falling 3.8% while oil prices fell more than 5% on fuel demand issues. [O/R]
The benchmark wiped out early morning losses and traded higher at 3.11%. [US/]
Price sensitive mega cap growth and technology stocks such as Microsoft Corp (NASDAQ:), Apple Inc (NASDAQ:) and Nvidia (NASDAQ:) Corp, fell between 1.0% and 2.5%.
At 12:28 PM ET, the S&P 500 fell 259.27 points, or 0.81%, at 31,839.72, the S&P 500 fell 40.44 points, or 1.00%, at 3,990.17, and the S&P 500 was down 145.73 points, or 1.21%, at 11,871.94.
Both the S&P 500 and the Nasdaq have broken below their 50-day moving average. The S&P 500 also briefly fell below the 50% Fibonacci retracement level, a key technical indicator that analysts have been watching, between the August highs and mid-June lows.
(Image: SPX Technical-
The , also known as Wall Street’s fear meter, rose for the third straight session, last trading at 26.87 points.
“It’s really an ongoing concern about how aggressive the Fed will be and whether what we’re going through now is just a retest of the June low or whether we’re headed for an even lower low,” said Sam Stovall, chief investment strategist at CFRA in New York.
Adding to the concerns, the Taiwanese military fired warning shots at a Chinese drone that buzzed a Taiwan-controlled islet near the Chinese coast.
Best Buy Co (NYSE:) rose 2.6% after it reported a smaller-than-expected decline in quarterly comparable sales as high discounts helped soften the blow to electronics demand from rampant inflation.
Twitter Inc (NYSE:) fell 1.8% as Tesla (NASDAQ:) Inc Chief Executive Elon Musk sent a new letter to cancel the deal to buy the social media company after whistleblower claims.
The number of declining issuances surpassed the avant-garde with a ratio of 3.83 to 1 on the NYSE and a ratio of 2.67 to 1 on the Nasdaq.
The S&P index made no new 52-week highs and 16 new lows, while the Nasdaq made 7 new highs and 168 new lows.