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NEW YORK, Oct. 5 (AP) Stocks fell in Wall Street trading Wednesday afternoon and gave up some of the gains made earlier in the week, as rising bond yields added to the pressure again.
The S&P 500 was down 0.8% as of 12:16 p.m. ET. The benchmark index is coming off its best two-day rally since spring 2020.
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The Dow Jones Industrial Average fell 175 points, or 0.6%, to 30,145, while the Nasdaq lost 1.2%.
The broader market was still battered by September’s losses, but investors had been hopeful that signs of economic weakness might persuade central banks to moderate their aggressive pace of interest rate hikes.
Wall Street is also gearing up for the next round of corporate earnings reports to get a better idea of ​​how stressful the hottest inflation in four years is for businesses and consumers.
Technology stocks and retailers led losses on Wednesday. Nvidia fell 1.1% and Target fell 1.2%.
After a few days of relief, U.S. Treasury yields rose and put more pressure on stocks. The yield on the 10-year Treasury note, which helps set rates on mortgages and many other types of loans, jumped to 3.77% from 3.61% late Tuesday.
Two-year yields were closer to expectations for Fed action, rising to 4.15% from 4.10% late Monday.
Energy stocks rose as U.S. crude rose 1.5%. Oil-exporting OPEC+ cartel decided to slash output to support oil prices. Exxon Mobil rose 3.9%.
Higher energy prices, especially gasoline, were a big reason for the spike in inflation earlier this year. While energy costs have fallen over the past few months, stubborn inflation remains a big focus on Wall Street.
The Federal Reserve and other central banks have been raising interest rates to make borrowing harder and slow economic growth, but Wall Street worries that a potential solution to high inflation could lead to a recession.
Investors are looking for signs that the economy is slowing enough to give the central bank a reason to ease in raising interest rates.
Some signs this week include a dovish rate hike by the Reserve Bank of Australia and a U.S. report showing a sharp drop in the number of available jobs in August.
Employment has been a particularly strong area of ​​the economy, and any sign that the red-hot job market is cooling could mean inflation could follow. Analysts say such hopes may be premature. A report on U.S. private employer employment growth on Wednesday came in stronger than expected, as did a report on the services sector.
On Friday, Wall Street will get a more detailed look at U.S. employment with the government’s monthly jobs report for September.
Terry Sandven, chief equity strategist at US Bank Wealth Management, said the stock market is “in a tug-of-war between reality and expectations.”
The reality, he said, is that inflation is still hot, and the market expects that inflation has peaked and the Fed will ease the pace of rate hikes.
With this dynamic and other uncertainties hanging over the market, trading is likely to remain volatile.
“We need time for the pace of inflation to show it’s under control,” he said.
The Fed said it was determined to keep raising interest rates until it was satisfied that inflation was under control. This determination has been echoed by some central banks around the world.
The Reserve Bank of New Zealand raised its benchmark interest rate to 3.5%, saying inflation remains too high, last at 7.3%, and labor is scarce.
The Reserve Bank of New Zealand raised interest rates by half a percentage point for the fifth consecutive time since February. (Associated Press)
(This is an unedited and auto-generated story from the Syndicated News feed, the body of the content may not have been modified or edited by LatestLY staff)
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