As Wall Street remained fixated on the rising chance that the Federal Reserve won’t decrease interest rates any time soon, the stock market’s September decline persisted on Tuesday.
The Dow Jones Industrial Average (DJI) fell roughly 400 points, or 1.2%, while the S&P 500 (GSPC) fell 1.5%. The heavily tech-focused Nasdaq Composite (IXIC) fell 1.6%. Despite having won to start the week, all three main stock indices are headed for a losing month.
Neel Kashkari, a policymaker at the Fed, reaffirmed previous statements made by other officials, saying that given the surprising resilience of the US economy, the central bank will likely need to raise rates again and maintain them at high levels to depress inflation.
Market pressure has been caused by the possibility of “higher for longer” interest rates. The yield on the 10-year Treasury (TNX) was close to its highest levels since 2007, which assisted in driving the dollar to a fresh 10-month high. The 10-year Treasury yield was at 4.55% at market close.
New information released on Tuesday revealed a decline in consumer confidence in September and a record surge in US home prices in July.
Jamie Dimon, CEO of JPMorgan, cautioned that markets might not be ready for the worst-case scenario, in which the Fed raises rates to 7% while stagflation occurs.
A warning from Moody’s that a government shutdown would affect the US credit rating only made the situation more gloomy. The deadlock might cause stocks to tremble with only a few days left before the Sept. 30 deadline for negotiating a budget agreement, according to history.
Highlights of this week’s economic statistics include a report on US second-quarter GDP on Thursday and a new reading on PCE inflation, the Fed’s favoured indicator, on Friday.
Tuesday’s stock losses picked up during the afternoon as concerns about higher interest rates sticking around longer than initially anticipated, declining consumer confidence, and a potential government shutdown dampened investor optimism.
The Dow Jones Industrial Average (DJI) fell roughly 400 points, or 1.1%, while the S&P 500 (GSPC) fell 1.5%. The heavily tech-focused Nasdaq Composite (IXIC) fell by almost 1.6%. The yield on the 10-year Treasury (TNX) was close to its highest levels since 2007, which assisted in driving the dollar to a fresh 10-month high. The yield on the 10-year Treasury bill was roughly 4.56%.
Target’s (TGT) issue with retail theft has forced the company to close its doors at a number of locations around the nation. As a result of the news, Target’s shares fell by almost 2%, reaching a session low.
Brooke Dipalma of Yahoo Finance reports:
The big box retailer revealed intentions to close nine locations on Tuesday, starting on October 21.
The company issued a statement saying, “We cannot continue operating these stores because theft and organised retail crime are endangering the safety of our team and guests and contributing to unsustainable business performance.”
One store in Harlem, New York; two in Seattle, Washington; three close to San Francisco and Oakland, California; and three in Portland, Oregon are among the businesses that will be closing.
The corporation announced that inventory shrinkage, primarily goods theft, will reduce profitability by $500 million this year, which led to the decision to liquidate outlets. Inventory shrinkage cost $700 million in lost income in 2022.
Target CEO Brian Cornell stated on the company’s second quarter earnings call that “shrink in the second quarter remained consistent with our expectations, but well above the sustainable level where we expect to operate over time.”
Prior to closing stores, Target stated that it “invested heavily in strategies to prevent and stop theft and organised retail crime in our stores,” including increasing store security, hiring outside security guard services, and integrating “theft-deterrent” techniques throughout our company.
It was a historic day for the United Auto Workers (UAW) union and their ongoing strike with the Big Three as President Biden attended the picket lines in Michigan and Ford (F) made a significant announcement regarding a new battery plant that would be built there.
At GM’s Van Buren Township parts warehouse in Michigan, Biden spoke with UAW protesters. Wall Street did not create this nation; rather, the middle class did. To UAW workers who were on strike, Biden declared, “The unions built the middle class. “Let’s continue; you have earned what you get. And you’ve made a lot more money than you’re currently being paid.
Biden was joined at the picket line by UAW president Shawn Fain, who thanked the president for joining the strike.
According to the White House, Biden’s visit was the first time in modern times that a president in office visited a picket line. The decision was made at the same time as his Republican competitor, former President Trump, announced he would also be travelling to the state. In Clinton Township, Michigan, on Wednesday, 500 former or present union members are anticipated to attend Trump’s event.
Prior to Biden’s visit, the Big Three—Ford, GM, and Stellantis—released statements, but they were uncritical of the president for supporting the UAW strikes.
President Biden stated that UAW workers “deserve a contract that sustains them and the middle class” on the first day of the strike. On the webpage for its UAW negotiations, Stellantis (STLA) stated, “We concur and made a record offer.
Ford also released a statement regarding the president’s visit to Michigan, which is notable because it is home to the company’s significant Michigan Assembly Plant. “Ford and the UAW will be the ones to resolve this by coming up with innovative answers to challenging problems together at the bargaining table. The long-term stability of the domestic car industry, the industrial Midwest, and well-paying manufacturing employment in the US are all issues that concern us, the business added.
On Tuesday, electric vehicle manufacturers were all over the Yahoo Finance trending tickers page. Shares of Fisker (FSR) increased by about 15% after the business declared that it anticipates delivering 300 vehicles per day by the end of the year. Rivian (RIVN) rose over 6% in the meanwhile after Baird referred to next week’s Q3 deliveries report as a near-term trigger.
JPMorgan raised shares of the online gambling operator DraftKings (DKNG) from Neutral to Overweight, noting that the stock has lagged too far behind the S&P 500 Index (SPX) since July despite substantial market share gains for DraftKings. As a result, the stock of the company surged by about 3%.
The Federal Trade Commission (FTC) and 17 state solicitors general sued Amazon on Tuesday, sending its shares down nearly 3% on the day.