NEW YORK. Wall Street was compact in late trading Wednesday (1/6), as investors bet that the latest economic data will not help to push the Federal Reserve off the track of an aggressive rate hike cycle to tame inflation.
The Dow Jones Industrial Average fell 176.89 points, or 0.54%, to 32,813.23, the S&P 500 fell 30.92 points, or 0.75%, to 4,101.23 and the Nasdaq Composite fell 86.93 points, or 0.72% to 11,994.46.
Among the 11 major S&P industrial sectors, the energy sector was the sole winner, closing up 1.8% as oil prices rose.
The financial sector fell 1.7%, and the healthcare sector, which is the biggest drag on the S&P 500, ended down 1.4%. The consumer staples sector lost 1.3% while the materials and real estate sectors also closed down more than 1%.
The volume of stock trading on US exchanges reached 11.45 billion with an average of 13.25 billion shares in the last 20 trading sessions.
Citing Reuters on Thursday (2/6), data showed that while US job openings fell in April, they remained at high levels. Showing continued wage increases contributed to very high inflation as companies scrambled for workers.
US manufacturing activity also increased faster than expected in May as demand for goods remained strong, easing concerns about an imminent recession.
Along with the data, investors are monitoring public comments from several Fed officials on Wednesday. And the Fed report showed the economy in most parts of the US expanded at a moderate or moderate pace from April to late May with signs the Fed's efforts to cool demand are being felt.
But strategists said they expect the market to fluctuate until inflation slows as far as investors can realistically bet on a pause in rate hikes.
"Unless and until we get a sustained lower pace of inflation, we can't put the idea of a pause on the table," said Mona Mahajan, senior investment strategist at Edward Jones.
Investors are watching economic data closely for clues about what it means for interest rates.
"There is no information to be found in today's release that is likely to make the Federal Reserve any less aggressive or to reduce hawkishness in its rate hike campaign," said Mark Luschini, chief investment strategist, Janney Montgomery Scott.
Also on Wednesday, San Francisco Fed President Mary Daly said she sees a 0.5% rate hike in the next few meetings as the central bank battles high inflation, raising interest rates to 2.5% as soon as possible. This is in line with comments from Fed Governor Christopher Waller on Monday.
Jamie Dimon, chief executive of JPMorgan Chase & Co, described the challenges facing the US economy as similar to a hurricane on the road and urged the Fed to take decisive steps to avoid the world's largest economy into recession.
Uncertainty about Fed policy, the war in Ukraine and lingering supply chain problems stemming from the COVID-19 lockdown in China have hit stocks, with the benchmark S&P 500 index down nearly 14% this year.
Stocks are unlikely to break through to the upside until markets have more clarity on inflation and consumers' ability to continue to absorb higher prices and Fed action, said Janney Montgomery Scott's Luschini.
"Nothing is imminent, which would seem to catalyze the shedding of all the worries that have pushed the market down to the levels we have today," he said.
source : https://id.tradingview.com/
