NEW YORK – US stocks ended with losses again on Wednesday (Aug 31), part of a downward trend set in motion by Federal Reserve chief Jerome Powell, who last week warned there would be no respite from interest rate hikes.
Cleveland Federal Reserve president Loretta Mester echoed Powell’s sentiments Wednesday, stating that she sees the Fed raising interest rates above 4 per cent by early next year during a speech in Dayton, Ohio.
In the meantime, investors are looking ahead to jobs data, particularly Friday’s all-important government employment report.
“We just had a quiet start to the week in data. And starting tomorrow and Friday, I think we’ll have a lot more information to digest,” said Jack Ablin of Cresset Capital.
New data on Wednesday (Aug 31) from payroll firm ADP showed American employers ratcheted back their hiring in August – private jobs increased by 132,000 in the month, less than half the pace of July.
The report could be good news for the Fed as it battles surging prices, amid fears the strong labour market will cause a wage spiral and higher inflation.
The Dow Jones Industrial Average fell 0.9 per cent, to finish the day at 31,510.43.
The broad-based S&P 500 dropped 0.8 per cent to close at 3,955.00, while the tech-rich Nasdaq Composite Index slumped 0.6 per cent to 11,816.20.
In individual stocks, Snapchat parent Snap was up 8.7 per cent after the company confirmed it is cutting 20 per cent of staff in an effort to restructure priorities.