Wall Street ahead of expected interest rate hike

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People walk at the New York Stock Exchange (NYSE) on September 16, 2022 in New York City. The Dow Jones Industrial Average fell again on Friday as economic concerns over inflation and global profits for transportation companies ease. (Photo by Spencer Platt/Getty Images)

(Photo by Spencer Platt/Getty Images)

NEW YORK (AP) – Stocks fell in morning trading on Wall Street on Monday as investors brace for another sharp rise in interest rates this week from the Federal Reserve.

The S&P 500 fell 0.2% at 10:18 a.m. EST. The Dow Jones Industrial Average fell 27 points, or 0.1%, to 30,799 and the Nasdaq fell 0.3%.

Health care stocks were the largest weightings in the market. Pfizer fell 2.1%. Energy stocks also slid as US crude oil prices fell 1.5%.

Wall Street remains focused on inflation and the Federal Reserve’s attempt to drive down prices by aggressively raising interest rates. On Wednesday, the central bank will announce its latest rate decision and is expected to raise its benchmark rate, which influences interest rates across the economy, by another three-quarters of a percentage point.

The 2-year Treasury yield, which tends to track Fed action expectations, rose to 3.96% from 3.87% late Friday. The 10-year yield, which influences mortgage rates, rose from 3.45% to 3.49%.

The broader market is coming off its worst week in three months following a surprisingly hot report on inflation and big business, including fedexwarning of worsening trends in the economy.

Wall Street worried about the Fed’s plan to cool the highest inflation in four decades could be too aggressive and plunge the economy into a recession by curbing growth too hard. Higher rates also tend to weigh on equities, especially the more expensive tech sector.

Investors will get another update on the housing sector on Wednesday when the National Association of Realtors releases August numbers for sales of previously occupied homes.

Average Long-Term U.S. Mortgage Rates climbed above 6% last week for the first time since the housing crash of 2008. Higher rates could make an already tight housing market even more expensive for US buyers.

Britain was observing a day of mourning for Queen Elizabeth II. The German DAX rose 0.1% while the CAC 40 in Paris lost 0.6%. Hong Kong’s Hang Seng lost 1% while the Shanghai Composite lost 0.3%. Japanese markets were closed for a holiday.

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AP Business Writer Elaine Kurtenbach contributed to this report from Bangkok.

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