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Wall Street ends down sharply; investors fret over economy

Published 09/29/2022, 05:45 AM
Updated 09/29/2022, 04:33 PM
© Reuters. A trader works on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., September 27, 2022. REUTERS/Brendan McDermid

By Noel Randewich and Ankika Biswas

(Reuters) - Wall Street ended sharply lower on Thursday on worries that the Federal Reserve's aggressive fight against inflation could hobble the U.S. economy, and as investors fretted about a rout in global currency and debt markets.

With tech heavyweights Apple Inc (NASDAQ:AAPL) and Nvidia (NASDAQ:NVDA) Corp slumping more than 4%, the Nasdaq sank to near its lowest level of 2022, set in mid-June.

The S&P 500 touched lows last seen in November 2020. Down more than 8% in September, the benchmark is on track for its worst September since 2008.

A sell-off in U.S. Treasuries resumed as Fed officials gave no indication the U.S. central bank would moderate or change its plans to aggressively raise interest rates to bring down high inflation. [US/]

Cleveland Fed President Loretta Mester said she does not see distress in U.S. financial markets that would alter the central bank's campaign to lower inflation through rate hikes that have taken the Fed funds rate to a range of 3.0% to 3.25%.

Data showed the number of Americans filing new claims for unemployment benefits fell to a five-month low last week as the labor market remains resilient despite the Fed's aggressive interest rate hikes.

"Good news is bad news in that today's job number again reiterates that the Fed has a long way to go," said Phil Blancato, head of Ladenburg Thalmann Asset Management in New York. "The fear in the marketplace is that the Fed is going to push us into a very deep recession, which will cause an earnings recession, which is why the market is selling off."

The most traded stock in the S&P 500 was Tesla (NASDAQ:TSLA) Inc, with $20.8 billion worth of shares exchanged during the session. The shares declined 6.8%.

Graphics: S&P 500 sheds $9 trillion in 2022 market rout - https://fingfx.thomsonreuters.com/gfx/mkt/dwvkroakgpm/Pasted%20image%201664454555732.png

The yields on many Treasuries, which are considered virtually risk-free if held to maturity, now dwarf the S&P 500's dividend yield, which recently stood at about 1.8%, according to Refinitiv Datastream.

The S&P 500 dropped 2.11% to end the session at 3,640.47 points.

The Nasdaq declined 2.84% to 10,737.51 points, while the Dow Jones Industrial Average declined 1.54% to 29,225.61 points.

Volume on U.S. exchanges was relatively heavy, with 11.6 billion shares traded, compared with an average of 11.4 billion shares over the previous 20 sessions.

All 11 S&P 500 sector indexes declined, led lower by utilities, down 4.06%, followed by a 3.37% loss in consumer discretionary.

Declining stocks outnumbered rising ones within the S&P 500 by an 11.6-to-1 ratio.

Meta Platforms ended down 3.7% after Bloomberg reported the Facebook (NASDAQ:META) owner froze hiring and warned employees of more downsizing to come.

CarMax Inc (NYSE:KMX) slumped nearly 25% after the used-car retailer missed expectations for second-quarter results, hurt by consumers cutting spending amid inflation, rising interest rates and higher car prices.

General Motors Co (NYSE:GM) and Ford Motor (NYSE:F) Co fell more than 5% each.

Airline carriers and cruise operators fell on canceled or delayed trips after Hurricane Ian hit Florida's Gulf Coast with catastrophic force.

American Airlines (NASDAQ:AAL), United Airlines Holdings (NASDAQ:UAL) and Delta Air Lines (NYSE:DAL) each lost more than 2%.

© Reuters. A trader works on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., September 27, 2022. REUTERS/Brendan McDermid

Cruise ship operators Norwegian Cruise Line (NYSE:NCLH) Holdings Ltd dropped 5.3% and Carnival (NYSE:CCL) Corp fell 6.8%.

The S&P 500 posted no new highs and 106 new lows; the Nasdaq recorded 14 new highs and 518 new lows.

Latest comments

"aggressive fight against inflation could hobble the U.S. economy" bla-bla... low rates made commodities  expensive for real economy because of market gamblers. Paper markets advanced
it is conceivable those big mouth talking heads are pathetic pawns of Big money powers. they don't know what they are talking about. simply parroting what they were told.
futures going higher aftermarket. it looks window dressing selloffs are over today. massive buybacks are inevitable tomorrow.
It is a volatile market right now $VIX
France, Germany and others are leashed under Washington control, a sadness situation in sinking dim outlook. If EU had included Ukraine and Russia in the block European Union, it would be a counterpoint to China and US, a new multipolar world, better impossible!
I think America is a World leader but now I understand it's just a slave of Biden and FED
if you print money equivalent to 40% to the size of the economy, expect overheating of the economy.... by the way, commodity prices are below pre-invasion levels for three months, yet the inflation is still sky rocketing....
it doesnt work like that, dollar is very expensive now (despite 30% supply QE), commodities are low because dollar is high and theres no future demand (due to recession), the inflation happened months ago, its just you get the data now
Not all commodities are low again.
The republican lead fed is intent on driving the economy in the ditch
if powell is incompetent, why the great brandon reappointed him for another term???? it's like incompetent appoints another incompetent....
Chair Powell is in check by the governors
  Powell IS competent, but not to Trump because Powell didn't take Trump's stupid opinions on monetary policy and wasn't cowed by Trump's threat of firing.  Powell has been a technocrat as he should be, not a partisan agent, not a Democrat as retrumplicans have been insinuating.
The economy not that bad now but fed wants to make it worse
Not about the economy worry about how fed want kill us
It's Putin who's threatening nuclear holocaust.
Wonder why Putin ready to nuke? Biden foreign policy! Ukraine is not a NATO country. Biden did nothing when Russia invasion started in 2014 in Crimea.
To honest I don’t believe these word get your own ideas
Exactly very true
Great Job joe Biden! Let’s see how low we can go
As opposed to yesterday? Market is a complete joke. Rigged seesaw.
it's rigged since the creation of the plunge protection team....
Russia is waging war and Russian currency is rising, we shall starve ourselves to bring it down.. JB.
The US is a net food exporter (and energy-independent).
Ukraine is not a NATO country. America First.
  Nobody said Ukraine is a Nato country
Guess the FED inspired 'BTFD' days are over
huh
is the West lying?
the West is dying?
Sound like a russian spy that's if you aren't already russian born.
"Russia, Russia, Russia" Jan wines.
A fair question. There is evidence it is.
Economy is super , lol soon 11700
And to think my "bull trap" comment got so many thumbs down yesterday.
Still not 2020 levels, don’t exaggerate
Obviously nothing the Fed did makes sense. Their strategy was to give irresponsibly money to people who did not need it until last December and now they are hiking rates inside a recession. All this is detrimental and catastrophic. The war reduced the oil supply as all wars have done in the past. You cannot hike rates in order to cause a recession in order to bring oil down. This approach that Jerome Powell has taken is criminal. We will end up with millions of unemployed, a social crisis, public anger, and a housing crisis like in 2008 where millions stopped paying home loans, and oil will remain similarly scarce because the war will most likely stay on. Inflation is reduced by accelerating supply chains and removing bureaucratic barriers to help markets produce the products and services that are scarce. Causing a bigger crisis in order to cover the problem of inflation is not a solution. Jerome Powell is the worlds most dangerous man right now.
I totally agree with giving irresponsible money to people however hiking interest rate is necessary even tho increasing supply would be best but it isn't possible to do so. Question to you! What did you think was gonna happen when the US started importing largely from Asia and Eastern Europe and including moved many jobs and manufacturing companies to those regions?
 Manufacturing abroad is not a bad thing per se as it diversifies your supply chains. But outsourcing completely like we did with chips and they are almost by over 90% made in Taiwan is complete policy failure. They supposedly passed the chips act to bring chip manufacturing back, but at the same time they plan to increase corporate taxes, healthcare and employment costs which again are not helping domestic production. Additionally, what rates do, is lifting the dollar against foreign currencies. This means we are not competitive producers and exporters anymore, as it costs more for others to buy our products. So you can say, US policy is making a step ahead and two backwards. : /
True True True however the US had started importing way too much while GDP keeps decreasing and it makes the supply sector a much bigger factor to inflation. Obviously can never forgive nor forget this presidency for the money printing.
the problem with the fed is that the fed members are humans so they pursue their personal interests first such as keeping their jobs before anything else. A computerized Fed program would minimize the flaws of self-interests.
I think a cybernetic congress would be most beneficial, I think the Fed is already so data driven that personal interests are inherently limited.
Ron Paul had it right, he wrote a book about this: END THE FED
you should read Ron Paul's book and "Creature from Jekyll Island"
Reuters is brushing off this year GDP changes and what this mean and discribe our economy for this year it is shamefull
all rigged, no chance with the manipulators in charge.
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