Market Snapshot: U.S. stocks pare losses as markets continue to reverberate around Fed

U.S. stocks pared losses on Monday morning as investors continued to react to comments from Federal Reserve Chairman Jerome Powell in Jackson Hole last week, in which Powell stressed policymakers are determined to squeeze inflation out even if it leads to Economic pain.

What happened

• Dow Jones Industrial Average DJIA, -0.07% fell 136 points, or 0.4%, to 32,147 after falling more than 300 points in early trade.
• S&P 500 SPX, -0.06% fell 21 points, or 0.5%, to 4,037. NASDAQ Composite, – 0.36% was down 112 points, or 0.9%, at 12,030.

  Stocks post worst Friday in months On the day, the Dow Jones Industrial Average fell 1,008.38 points, or 3%, to close at 32,283.40, its biggest percentage loss since May 18. The S&P 500 fell 3.4%, its biggest drop since June 13, and the Nasdaq Composite -0.36% tumbled 3.9 percent, its biggest drop since June 16.

  What drives the market?

  Speaking at the Kansas City Fed’s annual symposium in Jackson Hole, Wyoming, on Friday, Powell was blunt about the Fed’s commitment to reducing high inflation.

  SEE: Fed’s Powell sparks 1,000 rallies Fingers plummeted. Here’s what investors should do next.

  Powell says the Fed will keep fighting even if it means pain for American households and businesses. His remarks Seems to shatter the notion that investors are about to “pivot” away from aggressive rate hikes.

  “Chair Powell told us on Friday that the Fed is willing to accept a recession if that’s the cost of controlling inflation,” Bill Adams, chief economist at Dallas-based financial services firm Comerica, said by phone . “The Fed is preparing private sector watchers for ‘some pain’ for households and businesses, which I think is a polite way of saying ‘recession’. “

  Due to a theoretical slowdown in inflation and economic data There’s a delay between announcements, “meaning the Fed will wait longer for the economy to cool off before it’s willing to release the brakes,” Adams said.

  Ipek Ozkardeskaya, a senior analyst at Swissquote Bank Powell, said he also cited a resilient job market, suggesting he is willing to let unemployment climb. That means another strong reading on job growth in August could help strengthen the Fed’s resolve.

  “By Friday, NFP data is expected to print nearly 300,000 more new nonfarm payrolls in August. The U.S. has clearly beaten market expectations over the past four months, especially last month. , adding more than 500,000 jobs, compared to analysts’ expectations of around 250,000,” Ozkardeskaya said.

  Investors should not expect to see any Fed Changes in outlook. Instead, “from now on, we expect a deeper downside correction in stocks and a further retracement of the summer rally.”

  Read: With 3,900 as new line, stock market More Pain in the S&P 500 Sand, Chart Watchers Say “The wrong premise put the brakes on the front. The rally of the last two months was not the beginning of a bull market, but a rally in a bear market. Rather than a pivot, Powell’s speech was a stronger reaffirmation of the Fed’s unconditional commitment to fighting inflation — — and a reset to the stock market.”

  CIBC Private Wealth now expects a longer period of monetary tightening, greater risks to the growth outlook, and the stock market’s The reaction to news developments will also be more dramatic. “The concern going forward is that the Fed will keep raising rates even during a recession. That will be problematic for corporate profits and the market needs to adjust,” he said.

  Following companies

  • Tesla Corporation TSLA, -0.58% CEO Elon Musk said Monday that he aims to be by the end of the year Ready for the electric car maker’s self-driving technology, and said he hoped it could be released quickly and widely in the U.S. and even Europe, subject to regulatory approval, Reuters reported. Shares fell 1.2%. Bed Bath & Beyond Inc. BBBY, +27.65 % shares surged 14.5% to fight a sell-off in the broader market as meme stock investors expressed optimism ahead of the home improvement retailer’s strategic update.

  Monday, Boeing Bachelor of Arts, +1.15% Announced from United Parcel Service Inc. UPS, +0.03% for eight additional 767 freighters. This will bring package delivery giant UPS’s 767 Freighter fleet to 108. Boeing shares rose 1 percent.

  Other Assets

  • The ICE Dollar Index DXY was down less than 0.1%. Oil futures higher, U.S. benchmark CL.1, +3.80% rose 3.4% to close to $96.26 a barrel, while gold GC00, +0.05% rose 0.1% to $1,752.20 an ounce. Bitcoin BTCUSD, +1.52% rose 1.3% to around $20,259. Stoke Euro 600 SXXP, -0.81% closed down 0.8% while London markets were closed for the summer bank holiday.

  Shanghai Composite, +0.14% closed 0.1% higher, while the Hang Seng Index closed up 0.1% -0.73% Nikkei 225 NIK in Hong Kong and Japan closed down 0.7%, -2.66% down 2.7%.

  Best Money Days on September 21st and September 22nd Listen to Carl Icahn on New York. The legendary trader will reveal his thoughts on this year’s wild market moves.

  — Barbara Kollmeyer contributed to this article.