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Wall Street drops as hawkish Fed official comments weigh

Published 11/17/2022, 05:24 AM
Updated 11/17/2022, 04:32 PM
© Reuters. Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., November 15, 2022. REUTERS/Brendan McDermid

© Reuters. Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., November 15, 2022. REUTERS/Brendan McDermid

By Lewis Krauskopf, Ankika Biswas and Amruta Khandekar

(Reuters) - Wall Street's main indexes ended modestly lower on Thursday in a choppy session as hawkish comments from a U.S. Federal Reserve official and data showing the labor market remained tight led some investors to worry about more aggressive interest rate hikes.

St. Louis Fed President James Bullard said the central bank needs to keep raising rates given that its tightening so far "had only limited effects on observed inflation."

Stocks have retreated in recent days after a strong month-long rally spurred by softer-than-expected inflation reports that raised hopes the Fed would temper its rate hikes.

"The Fed is still talking up, generally, interest rates," said Paul Nolte, portfolio manager at Kingsview Investment Management in Chicago. "There might be some disagreement about the pace. But interest rates are not coming down anytime soon.”

Stocks reduced losses late in the session but the major indexes still ended in negative territory.

The Dow Jones Industrial Average fell 7.51 points, or 0.02%, to 33,546.32, the S&P 500 lost 12.23 points, or 0.31%, to 3,946.56 and the Nasdaq Composite dropped 38.70 points, or 0.35%, to 11,144.96.

Data showed the number of Americans filing new claims for unemployment benefits fell last week, suggesting the labor market remained tight. A report on Wednesday detailed strong retail sales growth last month, indicating the economy has weathered rate hikes.

Bets from traders of a 75 basis point hike at the Fed's next meeting climbed to 19% from about 15% a day earlier, according to the CME Group's (NASDAQ:CME) FedWatch tool. Most investors still expect a 50 basis point increase.

Cisco Systems (NASDAQ:CSCO) shares rose 5% after the company raised its full-year revenue and profit forecast with supply chain hurdles easing. The stock helped the S&P 500 information technology sector log a 0.2% gain.

Most S&P 500 sectors ended lower, however, with utilities shedding 1.8% and consumer discretionary dropping about 1.3%.

In company news, shares of Macy's (NYSE:M) surged 15% after the department store chain raised its annual profit forecast on resilient demand for high-end clothes and beauty products.

Declining issues outnumbered advancing ones on the NYSE by a 2.06-to-1 ratio; on Nasdaq, a 1.65-to-1 ratio favored decliners.

© Reuters. FILE PHOTO: Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., November 15, 2022. REUTERS/Brendan McDermid/File Photo

The S&P 500 posted 1 new 52-week highs and 1 new lows; the Nasdaq Composite recorded 46 new highs and 169 new lows.

About 10.3 billion shares changed hands in U.S. exchanges, compared with the 12.1 billion daily average over the last 20 sessions.

Latest comments

The force is so strong after fed speech the institision is keep on buying? Rebound so fast.  Againts fed view.
This is getting ridiculous...prepare for another MASSIVE boost
Did it really drop? Looks like it gain momentum off the infom the goverment released/control.
in 42 weeks w/ each of month of the year being in the negative for the jobs numbers (without seasonal adjustments (so it's probably much worse))  we lost 5.5 million jobs YTD:  So how is this a tight labor market? 60% labor participation rate?  Stop it
"lost 5.5 million jobs YTD ... 60% labor participation rate" -- Please post a link to your data source.
We can assume you're making bs up, then.
lol..Samana says the markets are fighting the Fed. What's one of the FIRST a trader is taught? DON'T fight the Fed.
lies, lies and lies
An absolute lie!
markets never go down, always in the green. let's go!
brilliant statement
Powell probably gave up on Trumpy chance He probabaly has pivoted to Biden chance.
Musk seems to have made a wrong bet on Trump's candidacy chance. This is why TSLA's share price fell to 1/2 in a year.
T-bond rates are falling like rocks. Because Powell will pivot.
For me, Joe Biden is the best president ever. A few months ago I cashed out all stocks and now I'm waiting for the bottom to buyback. As soon as he was elected I knew his policies would crater our economy and cause the stock market to plummet. This is a once in a lifetime opportunity and I'm in a position to take full advantage of it. Thanks again Mr. President.
Mkt tends to follow whatever Kerry Kitto says.
Biden emerges as an American traditional global leader. So, be bullish.
Biden's 2nd term win is now highly likely. So, Powell would need Biden.
You have brain damage. Seek help
Biden won't run in 2024. He's already drooling on himself, soiling himself and confused. By 2024 he won't even be able to speak coherently, he's close to that now!
Trumpy candidacy looks very weak. So, market has to go higher today.
Trump candidacy has nothing to do with the markets currently
Mkt will rally to close today. Probably Powell will support Dems' agenda for next 2 years so he would pivot. That is why.
The Fed's agenda is set by Congress.
Kerry you are not smart. Stop posting and go to school.
get bidens knee and elbow caps.
Democrats weren't calling for Trump's assassination.  Trump called for Pence's hanging.
no but Democrats did sit back quietly and smile while people raged and tried to attack SC justices after the roe v. wade leak.
es inato todo.
The crushing *******will be an income tax increase pushed through quickly by the lame duck congress.
your prediction of income tax increase is about as accurate as your previous prediction of red wave
The only red wave I ever predicted was the stock market downturn after the 2020 election.
Funny when things are getting cheaper and discount so people buy more for Xmas then it’s not good so fed want people lose their job and stop buying anything nice good job fed and Biden
Fed wants people to stop buying anything nice?  if that's the case shouldn't you blame President Orange since he was the one who appointed Powell as Fed Chairman?
did you type that with your head?
@Bill. No. With yiur sister's head.
when inflation comes down obviously retail sales goes up. how is this mixed data ? retailers are feeling the price fall and hence more spending.
 never let facts get in a way of a good rant, stop being such a killjoy
 finally - someone who realises the fantasy of retail stocks doing well - the hopium in the market right now is hilarious - thankfully, it looks like this phoney bullish counterrally is over - the hard data of the average Joe on the street is that they are suffering big time with just affording the essentials - all stymiies appart from in California are pretty much gone - savings rates are lowest in decades and credit cards are being maxed out and loans defaulted on - this screams one thing - major recession looming.
 Last time US saving rate was as low as now is during the GFC, not "decades".  And about your Tenn, he said "sounds good" to "every man/women is for him/herself and the weak are left in the gutter" --  no concern for "the average Joe on the street is that they are suffering big time".
Excuse da jour, another jer king today.
It's already making me cry to read the same thing since when Biden has been president. Try to come up with something else, because it is clear to everyone that he has to return the $500,000,000 for his campaign to his sponsors, even if they were to destroy the entire economy.
You don't know what you are talking about.
the DEMS should certainly return all the fraudulent funds handed to them from FTX just before it collapsed - shocking money laundering and fraud
  Sen. ********Durbin, D-Ill. and Sen. Kirsten Gillibrand, D-N.Y. have said they'll give the few $1000s in donations to charity.
futures ain't traded by investors. it's Algo.
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