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U.S. Stocks Seeing Further Downside Amid Interest Rate Concerns

wallstreet aug29 29aug22 lt

Stocks have moved mostly lower during trading on Monday, extending the sell-off seen in the previous session. The major averages have all moved to the downside on the day, falling to their lowest intraday levels in a month.

Currently, the major averages are near their lows of the session. The Dow is down 283.30 points or 0.9 percent at 32,000.10, the Nasdaq is down 127.54 points or 1.1 percent at 12,014.17 and the S&P 500 is down 35.45 points or 0.9 percent at 4,022.21.

Concerns about the outlook for interest rates continue to weigh on the markets following Federal Reserve Chair Jerome Powell's speech at the Jackson Hole economic symposium.

Powell's remarks were more hawkish than investors would have liked, signaling the Fed is likely to continue raising interest rates aggressively and maintain rates at a high level for an extended period.

The subsequent weakness on Wall Street reflects concerns the Fed's battle against inflation will led to a continued slowdown by the economy.

Trading activity remains somewhat subdued, however, as traders look ahead to Friday's closely watched monthly employment report.

Semiconductor stocks have shown a significant move to the downside on the day, dragging the Philadelphia Semiconductor Index down by 1.5 percent to its lowest intraday level in over a month.

Considerable weakness is also visible among pharmaceutical stocks, as reflected by the 1.4 percent drop by the NYSE Arca Pharmaceutical Index.

Gold, banking and healthcare stocks are also seeing notable weakness, while energy stocks are bucking the downtrend amid a sharp increase by the price of crude oil.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Monday. Japan's Nikkei 225 Index plunged by 2.7 percent, while Hong Kong's Hang Seng Index slid by 0.7 percent.

The major European markets have also moved to the downside on the day. While the German DAX Index is down by 0.6 percent, the U.K.'s FTSE 100 Index is down by 0.7 percent and the French CAC 40 Index is down by 0.9 percent.

In the bond market, treasuries have moved notably lower after ending last Friday's trading little changed. As a result, the yield on the benchmark ten-tear note, which moves opposite of its price, is up by 8.2 basis points at 3.117 percent.

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