Stocks On Wall Street Fall On Rate Path Worries, Bond Yields Rise

Barry Adams
29 Aug, 2022
New York City

Stocks extended losses after Friday's selloff and energy prices inched higher. 

Benchmark indexes eased as investors digested Friday's comments from the Federal Reserve chief and prepared for higher rates after the remaining two meetings of the policymakers in the year. 

Eight-week long market rally from the lows of mid-June was powered by investors hoping of economic soft landing and declining rates next year. 

However, those hopes were dashed after the Fed chief forcefully reiterated that the inflation is "too high" and the central bank will "take forceful measures as long as necessary" to cool down rapid price increases.  

The strong message sent a clear signal that the Fed may dip the economy in recession, if necessary, to cool down the high inflation to its preferred target rate of 2%. 

The S&P 500 index declined 0.6% to 4,034.10 and the Nasdaq Composite index dropped 1.0% to 12,018.90. 

Tech stocks led the decliners in a broad selloff for the second day but the energy complex stocks advanced after crude oil prices continued to rise on tight demand supply conditions. 

The natural gas prices in Europe are still running nine times, yes nine-fold, higher to the U.S. prices on the persistent worries of Russian-supply in the coming months. 

Futures of crude oil prices rose $2.94 to $95.96 a barrel and natural gas advanced 15 cents to $9.55 a British thermal unit. 

The yield on 10-year Treasury notes inched up to 3.11% and two-year notes rose to 3.41%. 

In trading on Wall Street, stocks lacked direction in morning but sell orders overwhelmed buy orders. 

Microsoft, Alphabet, Amazon.com, and Apple declined between 0.5% and 1.3%. 

Exxon Mobil, Marathon Oil, Hess Corp, and Valero Energy rose between 2% and 4%. 

Moderna Inc increased 1.2% to $138.43 after Swiss regulators approved the company's latest vaccine targeting the omicron variant. 

Walmart Inc rose 1.4% to $133.49 and the retailer offered to acquire the remaining stake in the South Africa-based Massmart for $378 million. 

Walmart's offer for the remaining 47% stake of Massmart is 53% higher than Friday's close price. 

Etsy Inc increased 0.8% to $105.17 and the online platform operator tightened verification measures for its seller's bank account information. 

Pinduoduo Inc soared 16.6% to $67.14 after the China-based online commerce platform operator reported better-than-expected quarterly results.