Wall Street fell for three consecutive days as fears of more aggressive interest hikes by the Federal Reserve.
The West Texas intermediate in the United States rose 48 cents to $99.72 per barrel today, following a better-than-expected stock fuel report. Wall Street recorded three consecutive days of today’s trading. The S&P is down by 1.10% to 3.983.06 points. Tech stocks still suffered from a sell-off, showing a decline of 1.12% on Wednesday’s opening trading hours.
The Dow Jones Industrial Average also dropped by 0.12%.
As for the European stock market, inflation is still high even though some reports show it has declined compared to July CPI reports.
As for the oil industry, supply and demand are still a serious problem the U.S and oil importers must solve soon. The U.S. report shows that fuel stocks declined better than expected and the oil demand is still growing. Taming inflation and high oil demand with low oil supply might cause a market recession in the next few months. The oil industry set a new low record with three months of price declines. the first time since 2020.
High inflationary pressure and higher interest rates have affected oil and fuel prices. We can say the same for the commodity market. Gold has declined by 0.77% to $1722 per ounce, the highest posting in 30 days of decline. Gold has declined from $1980 per ounce to $1700 per ounce over the past 3 months. Till now, there has been a low chance that gold will rebound even if the market is in a state of uncertainty.
On Friday, Jerome Powell said that reducing inflation is more likely to require a sustained period of below-trend growth. The S&P 500 fell 3% minutes after his speech in Jackson Hole, as did the Nasdaq and Dow Jones.
The Federal Reserve chairman also commented that there will be unfortunate costs, which include housing business commodity markets. Investors believe that there is a 50% possibility of 50 basis points of interest hikes. Others believe there is a 60% chance of an additional 25 basis-point interest rate hike. At the next meeting of the Federal Reserve money policymakers, the central banks will increase their interest rates by at least 2 quarters.
The housing market is currently experiencing one of its worst years in history.
Rising interest rates have affected the S&P 500’s market share. The S&P 500 has fallen below the 4.000 level as a result of the last four interest rate hikes. This is a strong and dangerous sign of a market downturn. We are seeing an increase in the bond market, including the 10-year treasury yields, which posted a 1.08% increase today. The two-year bonds also jumped, and the 30-year Treasury bonds are setting new highs. Mortgage lenders and home builders are complaining about the increase in mortgage interest rates. That is more likely to increase due to the combination of softer labor and higher interest rates. Simply put, buyers can’t afford new homes now.