Stocks on wall street continue to trend down
The labor market report dashed expectations that the Federal Reserve would cut interest rates to fight inflation. This announcement sent shares on Wall Street down almost 1% on Tuesday, extending a two-day losing streak, as investors worry that interest rates will not be cut immediately after the Federal Reserve addresses the inflation.
Although there was a rebound in the first minutes, it did not take long to go down the negative path. At 11pm (3pm GMT), the Dow Jones was down 0.9%, the S&P 500 was down 1.0% and the Nasdaq was down 1.1%.
In Europe, London's FTSE 100 fell in the afternoon after closing earlier on holidays, while Paris's CAC 40 fell after the day's gains.
Markets have weakened since Federal Reserve Chairman Jerome Powell said on Friday the central bank would stick to its strategy of raising interest rates to rein in 40-year-high inflation.
A strong labor market report on Tuesday morning dampened expectations that the Federal Reserve will ease its deflationary policy. The Fed's interest rate hikes are intended to control inflation by slowing down the economy, including employment.
The government reported 11.2 million job vacancies on the last day of July. On average, an unemployed person has around two jobs. In June, that number topped 11 million, and June's number also increased. Another important data from the labor market arrives on Friday, when the Ministry of Labor publishes the monthly employment report.
Wall Street fears the Fed will put too much pressure on an already slowing economy and push it into recession. Higher interest rates also affect the prices of investments, especially more expensive securities.
Major indices rose in July and early August on hopes that weak economic data would encourage the Federal Reserve to slow the pace of rate hikes. The central bank has raised interest rates four times this year and is expected to raise short-term rates by another 0.75 percentage point at its next meeting in September, according to CME Group.
Investors are closely watching economic data for other signs that the economy is slowing or that inflation may ease or at least remain at current levels. Businesses and consumers have been hit hard by rising prices for everything from food to clothing, but the recent drop in gas prices has provided some relief.
Consumer confidence gained some confidence in August, according to a Conference Board survey. Consumer confidence rose this month after falling for three consecutive months. It also rose much more than economists expected.
Tech stocks are hitting the market in huge numbers. Chipmaker Nvidia fell 1.1 percent. The energy sector declined, with US crude oil falling 4.8% and Chevron shares down 3%. That was a bright spot, a 5% gain after Best Buy reported results for the latest quarter that were much better than analysts expected.