Federal Reserve Chair Jerome Powell
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- US stocks fell on Tuesday, marking a three-day decline, as fresh employment data backed views for a hawkish Fed.
- Job openings unexpectedly increased to 11.2 million in July, indicating the labor market remains tight.
- The decline comes just days ahead of the Fed’s planned acceleration of its balance sheet reduction program.
US stocks closed lower on Tuesday, marking a three-day decline, as fresh employment data backed views for a hawkish Federal Reserve.
Indexes gave up early gains and reversed lower after job openings unexpectedly increased to 11.2 million in July, indicating the labor market remains tight. The report came as investors continue to reel from Fed Chairman Jerome Powell’s speech at Jackson Hole on Friday, when he reiterated the Fed’s resolve to tame inflation by raising interest rates and reducing its $9 trillion balance sheet.
The Fed’s balance sheet reduction program is set to accelerate to $95 billion per month in September, and that could remove liquidity from the market as it rolls off its Treasury and mortgage-backed security holdings.
Here’s where US indexes stood at the 4:00 p.m. ET close on Tuesday:
One area where the Fed’s tightening has had an almost immediate impact is the housing market, which continues to see a marked slowdown as mortgage rates rise. Lumber prices fell to a new 2022 low on Tuesday as higher borrowing costs continue to weigh on housing.
Stock market investors are entering a choppy period following the Fed’s Jackson Hole symposium and after a “premature recovery” from lows this summer, Goldman Sachs’ chief global equity strategist Peter Oppenheimer said Tuesday on CNBC.
Twitter shares slipped Tuesday after Elon Musk cited a whistleblower who spoke out against the social media company as another reason to exit his pending multibillion-dollar takeover.
Europe is close to hitting its targets for stockpiling natural gas ahead of winter, with countries two months ahead of schedule on storage as they scramble to replace Russian supplies. Inventory data shows the European Union had filled up its winter reserves to 79.94% as of Sunday, according to Gas Infrastructure Europe. That’s just shy of its goal of 80% by November 1.
Warren Buffett’s Berkshire Hathaway has trimmed its BYD stake for the first time in 14 years, a Hong Stock Exchange filing revealed Tuesday. The famed investor’s conglomerate sold about 1.3 million shares of the Chinese electric-vehicle maker for around $47 million last week. The disposals reduced its position from 220 million shares to 218.7 million shares, the filing shows.
Oil prices slipped Tuesday, as markets are anticipating additional, aggressive rate hikes from central banks, which could spark a slowdown in demand. West Texas Intermediate crude oil sank 5.5% to $91.64 per barrel. Brent crude, oil’s international benchmark, plunged 5.4%% to $99.44 a barrel.
Bitcoin ticked down 0.7% to $19,978. Ether prices rose 0.9% to $1,545.
Gold dipped 0.8% to $1,736 per ounce. The yield on the 10-year Treasury note was flat at 3.11%.
