Stocks closed lower on Wall Street and the major indexes deepened their losses this week. The S&P 500 fell 1.1% on Thursday. Benchmark indices are down for a week following Tuesday’s biggest market drop in more than two years. After reaching a tentative labor agreement, railroad operators largely boosted prices and avoided a nationwide strike that could have devastated the economy. Software maker Adobe plunged after announcing a $20 billion acquisition of the design firm and disappointing earnings forecasts for the quarter.
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Stocks fell in afternoon trading on Wall Street on Thursday, with major indexes deepening losses this week.
The S&P 500 was down 1.4% as of 3:35 pm ET. The benchmark index fell 4.3% in a week, following the biggest market drop in more than two years on Tuesday.
The Dow Jones Industrial Average rose early, falling 220 points (0.7%) to 30,909, while the Nasdaq fell 1.7%.
Technology stocks held the largest weight in the broader market. Adobe fell his 17.2%, the biggest drop among S&P 500 stocks. This comes after the software maker announced his $20 billion acquisition of the design firm and released disappointing earnings forecasts.
US oil prices fell 3.8%, weighing on energy stocks. Hess fell 2.9%.
After reaching a tentative labor agreement, railroad operators largely boosted prices and avoided a nationwide strike that could have devastated the economy. Union Pacific he rose 0.1%.
Bond yields rose. Yields on 10-year Treasuries, which help determine where mortgage and other loan rates are headed, rose to 3.46% from 3.40% at the end of Wednesday. Two-year US Treasury yields climbed to 3.86% from 3.79%.
Investors were digesting the latest report on retail sales, which shows mixed views on how consumers are coping with the hottest inflation in 40 years. Retail sales unexpectedly rose 0.3% in August after he fell 0.4% in July, according to a government report. Inflation has hit several areas of spending, but restaurant business is still growing, but at a slower pace, with furniture and online sales declining.
Consumer spending, along with employment, has become a strength of the economy as a whole as inflation continues to weigh on businesses and consumers. High prices and aggressive Fed rate hike plans as a solution remain Wall Street’s main concerns.
August’s higher-than-expected report on consumer prices on Tuesday surprised markets and dashed hopes that the Fed might consider easing rate hikes. Reports continued on Wednesday that wholesale prices were still rising.
Investors are worried that the Fed’s rate hikes could overextend the slowdown in the US economy and plunge it into recession. The central bank has already raised its benchmark interest rate four times this year, with the most recent two raising him by three-quarters of a percentage point. According to CME Group, traders now see a 1 in 5 chance that the Fed will raise the benchmark interest rate by 1 percentage point, four times its usual rate.
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