Stock market news live: Stocks fall as Wall Street prepares for Fed meeting

U.S. stocks edged lower early Monday, trailing the three major indexes recorded their worst week ever after three months.

The S&P 500, the Dow Jones Industrial Average and the tech-heavy Nasdaq were all down about 0.6 percent in early trading.

Meanwhile, in the bond market, the benchmark 10-year US Treasury rose to 3.49%, its highest level since 2011, while the 2-year Treasury breached a 15-year peak of 3.9%.

Investors are preparing for Two-day Federal Reserve policy meeting On September 20-21. The US central bank is expected to deliver a third consecutive increase of 75 basis points at the end of discussions on Wednesday at 2:00 p.m

Higher than expected last week’s inflation data triggered a sell-off in US stock markets after renewed fears that the Fed would scale up its monetary tightening efforts and tip the economy into recession. The benchmark S&P 500 lost 4.7% for the week, the Dow Jones Industrial Average fell 4.1% and the tech-heavy Nasdaq Composite tumbled 5.5%.

Earnings warning from delivery giant FedEx (FDX) also heightened growth concerns on Friday after the company said a global recession may be underway, withdrawing its full-year guidance on macroeconomic trends that have “deteriorated significantly.”

NEW YORK, NEW YORK - SEPTEMBER 16: Traders work on the floor of the New York Stock Exchange (NYSE) on September 16, 2022 in New York City.  The Dow Jones Industrial Average fell again on Friday as economic concerns about inflation and global corporate profits for transportation companies eased.  (Photo by Spencer Platt/Getty Images)

NEW YORK, NEW YORK – SEPTEMBER 16: Traders work on the floor of the New York Stock Exchange (NYSE) on September 16, 2022 in New York City. The Dow Jones Industrial Average fell again on Friday as economic concerns about inflation and global corporate profits for transportation companies eased. (Photo by Spencer Platt/Getty Images)

Of the S&P 500 companies that held earnings calls from June 15 to Sept. 8, 240 cited the term “recession,” the highest number cited since at least 2010 and well above the five-year average of 52, according to data from FactSet Research.

As investors head into the earnings season, Wall Street strategists are sounding the alarm about earnings expectations as macroeconomic headwinds, including inflation and interest rate pressures, increasingly show signs of weighing on corporate margins.

Bank of America’s Michael Hartnett warned in a recent note that earnings cuts will be a catalyst for a deeper selloff and sees the S&P 500 swinging toward 3,600 — and even 3,000 in the event of a bear. At Friday’s close, the index was 3873.33.

As Fed worries kept investors in a risk-on mood, sentiment was also felt in cryptocurrency markets. Bitcoin (BTC-USD) fell below $19,000 and Ethereum (ETH-USD) extended a slide to move near the $1300 level after it long-awaited “merger” last week.

Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc

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