Tech stocks led the decliners with fewer bulls on Wall Street willing to step up ahead of the rate hike decision next week. Crude oil dropped 3% and the yield on 2-year Treasury notes jumped to a 15-year high.
Stocks struggle to gather momentum as investors study conflicting economic data. Labor market conditions remain tight and consumer spending is holding up in the face of high inflation but bond yields are rising rapidly.
Global markets trade lower on the rising economic uncertainties, deepening energy crisis in Europe, persistent lockdowns in China and rising rates in the U.S.
Homebuilders extended losses for the second cay after mortgage application volumed dropped by a third. Railroads declined ahead of a possible worker strike. Nucor lowered its earnings outlook.
Benchmark indexes plunged in a vicious sell-off after investors feared that the Federal Reserve may have to accelerate and enlarge the current rate hike regime.
Consumer prices rose at a slower pace in August but remained elevated driven by rising cost of food and shelter. Treasury yields surged and the stock sell-off deepened on the worries that high prices are rapidly spreading in the broader economy.
Stocks rebounded after trading down for weeks and investors factor higher rates and slower economic growth as a new backdrop for the business environment.
Investors remain skeptical of the Fed's ability in bringing down sky-high inflation, despite forceful reminders from the Fed Chair Powell. The U.S. economy is likely to be saddled with low growth for a decade ahead.
