Wall Street’s main indexes fell on Tuesday as a stronger-than-expected reading in the U.S. services sector fueled expectations that the Federal Reserve will keep raising interest rates to control inflation.
* The tech-heavy Nasdaq was headed for its seventh consecutive day of losses in what could be its longest losing streak since November 2016.
* Interest-rate sensitive stocks including Apple (NASDAQ: AAPL ), Amazon.com Inc (NASDAQ: AMZN ) and Microsoft Corp (NASDAQ: MSFT ) were down around 1% as benchmark yields for US Treasuries rose to their highest levels since June.
* The Dow Jones Industrial Average fell 104.63 points, or 0.33%, to 31,213.81, while the S&P 500 fell 9.49 points, or 0.24%, to 3,914.77. The Nasdaq Composite was down 49.39 points, or 0.42%, at 11,581.47.
* The CBOE volatility index, also known as the Wall Street fear gauge, rose to 26.5 points.
“The biggest concern by far for almost everyone is really what’s going to happen with the Federal Reserve and interest rates,” said Randy Frederick, vice president of trading and derivatives at Charles Schwab (NYSE: SCHW ) in Austin, Texas. . “The Fed will definitely continue to raise interest rates, I think there is no question about that. The only question is how much and how fast.”
* A survey by the Institute of Supply Management showed that the US service industry rebounded in August for the second straight month amid stronger growth in orders and employment, while supply bottlenecks and pressures eased. about prices.
* But figures from S&P Global showed that the services sector PMI fell short of preliminary estimates for August.
* Traders see about a 75% chance of a third 75 basis point rate hike at this month’s Fed policy meeting.
* Attention will turn to Fed Chairman Jerome Powell’s speech on Thursday as well as US consumer price data next week for clues on the path of monetary policy.