Dow: Stocks fall on fears of another big Fed rate hike

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The dow ended the day down more than 640 points or 1.9%. The S&P 500 and Nasdaq decreased by 2.1% and 2.6% respectively.

All 30 Dow stocks were lower, and only 25 of the blue-chip S&P 500 stocks rose on Monday.

Stocks also fell on Friday as the market snapped a four-week winning streak. After the first half of 2022, markets rebounded in July and August.

Concerns are mounting that the Fed has yet to engage in super-sized interest rate hikes. The Fed raised rates by three-quarters of a percentage point, or 75 basis points each June and july
Markets fight the Fed
But after the latest information consumer and manufacturer pricesInvestors were hoping the Fed would raise interest rates by just half a point in September after seeing inflation cool slightly last month.
The thinking was that inflation was falling and the economy might be slowing down. However, the job market remains strong and retail sales remained fairly good despite inflation.

This has led more market watchers to predict that the Fed may remain aggressive with rate hikes in the near future. The odds of another 75 basis point increase versus half a point increase are now seen as roughly 50-50.

“Market expectations about what the Fed will do have a track record of swinging based on economic data,” Lindsey Bell, chief money and markets strategist at Ally Invest, said in a report on Monday. “As long as the Fed is in the driver’s seat, volatility is likely to remain high and the market will remain bearish.”

Stocks may be volatile all week as investors wait Fed Chairman Jerome Powell will make a highly anticipated speech Friday at the Kansas City Fed’s annual Jackson Hole symposium. Moreover, the Fed’s next interest rate decision is not until September 21. So there’s a lot of economic data ahead, including the jobs report and inflation numbers for August.
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“It’s more like a bull rally in a bear market,” Oktay Kavrak, director of product strategy at Leverage Shares, said of what has happened to stocks in the past few weeks. “Recession is still key and inflation remains stubbornly high. This could be one of those years when the market remains volatile.”

Investors are clearly avoiding riskier assets as a result. breast stocksWhom AMC (AMC), Bed Bath & Beyond (BBBY) and GameStop (GME), was back in the red on Monday after major declines late last week. Bitcoin and other cryptocurrencies also fell on Monday, and all have fallen sharply over the past week.

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