Stocks closed lower on Wall Street, led by falls in large companies technological and erasing the S&P 500’s gains for the week.
The S&P 500 fell 0.7% on Wednesday, while the Dow Jones fell 0.5% and the Nasdaq 1.2 percent. The values of the Small business fell more than the rest of the market.
Wall Street was absorbing a mix of updates on retail that showed inflation pressure continues to affect businesses and consumersbut it also shows that spending remains strong.
The companies technological and the retailers, high-priced, suffered some of the biggest losses. The companies of public services and the energy values they held up better than the market in general.
Target fell 2.3% following reporting a nearly 90% plunge in second-quarter profit as it was forced to cut prices to clear unwanted inventories. The retailer warned earlier this summer that it was canceling orders from suppliers and aggressively cutting prices due to a sharp spending shift by Americans as the pandemic abated.
Children’s clothing and accessories chain Children’s Place fell 12.4% following reporting some surprising losses in the second quarterfaced with problems in the supply chain and pressure from the inflation.
Bond yields rose sharply. The 10-year Treasury yield rose to 2.89% from 2.81% on Tuesday.
US retail sales did not vary last month, according to the Commerce Department, and economists had expected a slight increase in July. Part of the weakness was due to a 1.8% drop in gasoline sales, reflecting lower prices at gas stations.
Wall Street has been closely monitoring the latest economic data and business updates to get a better idea of how inflation is affecting businesses and consumers and whether the highest inflation of the last 40 years is peaking or starting to cool off. Investors also monitor inflation to determine how much further investors have to go. central banks in their fight once morest rising prices.
Britain’s inflation rate rose in July to a new 40-year high, the 10,1%, at a faster pace than in the US and Europe, as rising food prices in the UK added to pressure on the cost of living, fueled by rising energy costs. Inflationary pressures prompted the Bank of England to raise its key interest rate by half a percentage point this month, the biggest of six consecutive hikes since December.
The Federal Reserve has been raising interest rates to slow the economy and tame inflation, but investors remain concerned it may hit the brakes too hard and send the economy into recession. In July, the Fed raised its benchmark interest rate by three quarter point for the second time in a row. Wall Street will learn more regarding the process of that decision when the Fed releases the minutes of that meeting later on Wednesday.
(With information from AP)
Keep reading: