Get 40% Off
💰 Ray Dalio just increased his holdings in Google by 162.61% - See the full portfolio with InvestingPro’s free Stock Ideas toolCopy Portfolios

U.S. stocks are falling as investors worry about rising interest rates

Published 07/09/2023, 15:03
© Reuters.
US500
-
DJI
-
CL
-
GME
-
IXIC
-
CHPT
-

Investing.com -- U.S. stocks were mostly falling, led by tech stocks, as investors continue to worry about elevated oil prices and rising interest rates.

At 09:53 ET (13:53 GMT) the Dow Jones Industrial Average was up 13 points or flat, while the S&P 500 was down 0.6% and the NASDAQ Compositewas down 1.4%.

The major Wall Street indices closed lower on Wednesday, with the blue-chip Dow Jones Industrial Average ending almost 200 points, or 0.6%, lower, while the tech-heavy Nasdaq Composite dropped 1.1% and the broad-based S&P 500 fell 0.7%.

Fed hike expectations rise

Sentiment has been hit this week by concerns the recent stronger-than-expected economic data and rising oil prices will prompt the U.S. Federal Reserve to keep interest rates higher for longer.

Data released Wednesday showed that the U.S. services sector – which makes up more than two-thirds of the American economy – unexpectedly accelerated in August, hitting a six-month high. Input costs paid by these businesses also rose. 

At the same time crude prices have risen to their highest level this year, stoking concerns about the cost of energy and its effect on inflation, again having an impact on inflation going forward.

This has resulted in bond yields climbing, with investors factoring in a greater chance of the Fed raising interest rates once more by the end of the year.

According to Investing.com's Fed Rate Monitor Tool, the probability that America's central bank will choose to raise rates at its November meeting now stands at 43.6%, up from 39.3% in the prior day.

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .

Jobless claims data due

New jobless claims came in lower than expected at 216,000 last week. They had been expected to rise to 235,000 from 228,000 the prior week. 

The Fed has been closely watching the labor market for signs that the tight conditions are easing, something it wants to see to prove its inflation fighting efforts are working. 

There are also a number of Federal Reserve officials due to speak later Thursday at a fintech conference hosted by the Philly Fed, and their comments are bound to be studied for monetary policy clues ahead of entering the blackout period that precedes each policy meeting.

GameStop post smaller-than-expected quarterly loss

In corporate news, GameStop (NYSE:GME) exceeded estimates for quarterly revenue and posted a smaller-than-expected loss. But shares were down 2%.

ChargePoint (NYSE:CHPT) stock slumped more than 25% after the owner of EV charging stations missed revenue expectations.

Crude weakens on weak Chinese trade data

Oil prices fell Thursday, edging back from 10-month peaks after the release of weak Chinese trade data overshadowed another draw in U.S. inventories, signaling tightening supplies.

Data released late Wednesday by the industry body American Petroleum Institute showed U.S. crude inventories fell for a fourth straight week, dropping 5.5 million barrels in the week ending Sept. 1.

The reading usually acts as a precursor to inventory data from the Energy Information Administration, which is due later in the day. 

(Peter Nurse and Oliver Gray contributed to this item.)

 

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.