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Wall Street closes little changed on Fed policy fears

Stock Markets Aug 08, 2022 06:56PM ET
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2/2 © Reuters. A trader walks on the trading floor at the New York Stock Exchange (NYSE) in Manhattan, New York City, U.S., August 3, 2022. REUTERS/Andrew Kelly 2/2
 
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By Herbert Lash and Bansari Mayur Kamdar

(Reuters) - Wall Street closed mostly flat on Monday after blockbuster jobs data last week reinforced expectations the Federal Reserve will crack down on inflation, while a revenue warning from chipmaker Nvidia (NASDAQ:NVDA) reminded investors of a slowing U.S. economy.

Stocks retreated from earlier highs as last week's blowout labor market report was initially seen as a sign the economy could withstand aggressive interest rate hikes by the Fed to tame inflation running at four-decade highs.

Investors now await consumer price data on Wednesday to gauge whether the Fed might ease a bit in its inflation fight and provide better footing for the economy to grow.

"The CPI data will help to confirm if the Fed's tightening efforts have been successful in starting to tame inflation or if continued Fed tightening is needed," said Robert Schein, chief investment officer at Blanke Schein Wealth Management.

The Dow Jones Industrial Average rose 29.07 points, or 0.09%, to 32,832.54, while the S&P 500 lost 5.13 points, or 0.12%, to 4,140.06 and the Nasdaq Composite dropped 13.10 points, or 0.1%, to 12,644.46.

Volume on U.S. exchanges was 11.01 billion shares.

The S&P 500 has bounced back 14% from mid-June lows. But signs of inflation running too hot could cement the Fed's case for aggressive monetary policy tightening.

Anthony Saglimbene, chief market strategist at Ameriprise in Troy, Michigan, said the market was due to pull back at some point as traders test the recent rebound.

"Maybe we can get a little bit higher by year end, but that's if everything lines up perfectly," he said, adding that the University of Michigan's preliminary consumer sentiment survey for August on Friday also will be closely watched.

"That's the tug of war between these data sets that tell the story about, 'Hey, are we going to turn into a recession or avoid one?'"

U.S. rate futures have priced in a 67.5% chance of a 75-basis-point hike at the Fed's next meeting in September, up from about 41% before the labor market data beat market expectations. [FEDWATCH]

The information technology sector fell 0.9% as chipmaker Nvidia Corp slid 6.3% after the company said it expects second-quarter revenue to decline 19% from the prior quarter to about $6.7 billion, due to weakness in gaming.

The Philadelphia SE Semiconductor index slid 1.6%, while value stocks rose 0.1% to outpace a 0.4% drop in growth.

Tesla (NASDAQ:TSLA) rose 0.8% as the U.S. electric-car maker signed contracts worth about $5 billion to buy battery materials from nickel processing companies in Indonesia, according to a CNBC report.

Shares of U.S. automakers jumped after the U.S. Senate on Sunday passed a $430 billion bill to fight climate change that created a $4,000 tax credit for used electric vehicles and provides billions in funding for their production.

Rivian Automotive Inc rose 6.78%, Ford Motor (NYSE:F) Co gained 3.14%, General Motors Co (NYSE:GM) added 4.16% and Lordstown Motors Corp advanced 3.17%.

Signify Health Inc shot up 11.0% on a media report that CVS Health Corp (NYSE:CVS) was looking to buy the health technology company.

Palantir Technologies (NYSE:PLTR) Inc dropped 14.2% after the data analytics software company lowered its annual revenue forecast as the timing of some large government contracts remained uncertain.

Tyson Foods Inc (NYSE:TSN) fell 8.4% after missing quarterly profit expectations.

Advancing issues outnumbered declining ones on the NYSE by a 2.28-to-1 ratio; on Nasdaq, a 1.67-to-1 ratio favored advancers.

The S&P 500 posted eight new 52-week highs and 29 new lows; the Nasdaq Composite recorded 104 new highs and 27 new lows.

Wall Street closes little changed on Fed policy fears
 

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Comments (12)
David Ben Simoun
David Ben Simoun Aug 08, 2022 8:45PM ET
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A severe correction is on the making. It's always complicated to impossible to time the market. But the effect of the erroneous J Powell dovish discourse is going to fade away quickly. All indices are over extended. If Wednesday numbers are bad then we will see big moves. Remember: we are in summer time and volumes are lower than usual. So any move will be exacerbated. Buckle up!!
Jay Garrelts
Jay Garrelts Aug 08, 2022 6:00PM ET
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Don’t fear the Reefer
Shamo Nestor
Shamo Nestor Aug 08, 2022 2:25PM ET
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Keep playing politics with the economy and manipulating the market will make ordinary investors will suffer most
Dennis Wozny
Dennis Wozny Aug 08, 2022 1:51PM ET
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We have yet to see bottom. Not even close. Buckle up folks.
Mitchel Pioneer
Mitchel Pioneer Aug 08, 2022 1:43PM ET
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Floor of titanium at the break even level.  What a joke.  Where's the ceiling during all of these miraculous, intraday "recoveries?"  Laughingstock of the investing world.
First Last
First Last Aug 08, 2022 1:43PM ET
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The ceiling is at SPX 4200.
First Last
First Last Aug 08, 2022 1:43PM ET
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And the market is near day's low, so don't get triggered about "recoveries".
Zhikang Sim
Zhikang Sim Aug 08, 2022 12:14PM ET
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this author is sick...
Brad Albright
Brad Albright Aug 08, 2022 12:14PM ET
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There are two authors. Which one is sick? I'd like to send a card.
Dave Jones
Dave Jones Aug 08, 2022 11:37AM ET
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What utter drivel this article is. How the writers find time off from uber gigs to write this rubbish is beyond me.
ottin nerner
ottin nerner Aug 08, 2022 11:37AM ET
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what can you expect from free articles???? if you want more reliable market news go buy WSJ and FT.... i only go here for entertainment....
Dave Jones
Dave Jones Aug 08, 2022 11:37AM ET
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ottin nerner I'm here for the popcorn 🍿🍿🍿🍿
neang aee 냥에
neang aee 냥에 Aug 08, 2022 10:05AM ET
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Still too much money in the market.Needs for more tightening forces.
First Last
First Last Aug 08, 2022 10:05AM ET
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Wealthy disparity is still high.
Bruce Hood
Bruce Hood Aug 08, 2022 9:42AM ET
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So indexes rose on the jobs data?? But last week the market plunged on the jobs data
Stan Smith
Stan Smith Aug 08, 2022 9:31AM ET
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Hmmm... no news on Nvidia? ahhh yes, contrived pumps only work with positive news covers
First Last
First Last Aug 08, 2022 9:31AM ET
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There are news on NVDA.
 
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