Tuesday was the third day in a row that U.S. stocks went down. This continued a slide that began Friday after Fed Chair Jay Powell gave a speech in Jackson Hole. When the Wall Street bell rang, the S&P 500 was down 1.1%, the Dow was down 1%, and the tech-focused Nasdaq was down 1.1%. The drop on Tuesday happened even though economic data continue to show that the U.S. economy is strong, despite early summer fears that the economy would fall into a recession.
With a stronger economy, the Fed is probably more likely to keep raising interest rates. The Labor Department’s Job Openings and Labor Turnover Survey, or JOLTS, showed that the number of job openings in the U.S. rose to 11.2 million last month. This shows that the labor market is still tight because employers are having trouble filling job openings. Bloomberg polled economists, and they said that there would be 10.375 million openings in July. In June, the number of openings was revised sharply up, from 10.698 million to 11 million.
A report from the Conference Board on Tuesday morning also showed that U.S. consumer confidence went up in August, after going down for three months in a row. This was because Americans were less worried about the economy because gas prices were going down. The index went up to 103.2 in August after being revised down to 95.3 the month before. Bloomberg data shows that economists thought the print would be 98.
On the housing market, the Standard & Poor’s CoreLogic Case–Shiller Home Price Index showed an annual increase of 18.0% in June, which was less than the 19.9% increase in May. The 20-City Composite went up by 18.6% year over year, which is less than the 20.5% increase seen the month before. In the commodities market, oil prices dropped more than 5% because there were new worries that a global recession would hurt demand and because Iraq’s export numbers were better than expected.
West Texas Intermediate crude oil had its biggest drop in two weeks, falling 5.5% to less than $92 per barrel. Brent futures also fell 5.5% to $99.25 per barrel, which was their lowest price in two weeks. On Tuesday, oil prices lost all of the ground they had made since Monday. On Tuesday, shares of Nikola (NKLA) fell by 9% after the company said it might sell stock to raise up to $400 million to pay for production costs because labor and raw materials are getting more expensive. Bed Bath & Beyond Inc.
(BBBY) shares dropped about 10% as investors waited for an update on the company’s plans for the future, which will come later this week. The meme stock has gone up more than 170% this month and is on track to have its best month ever in August. Shares of Baidu (BIDU), a Chinese search engine, dropped by more than 6% after the company reported quarterly revenue on Tuesday that was higher than expected, thanks to growth in its cloud business. The company’s quarterly sales, on the other hand, went down for the first time in two years.
“Stocks had a good chance of going up for a second week in a row last Thursday, but the market went decisively into the red after Powell’s speech at Jackson Hole,” Chris Larkin, managing director of trading at Morgan Stanley’s E*TRADE, said in a note. Even though there is a lot of economic news this week, investors and the Fed will pay the most attention to the job report on Friday.
Friday morning at 8:30 a.m. ET, the Labor Department will release its August employment report, which is likely to show that the U.S. job market had another good month. According to data from Bloomberg, economists think that the number of jobs outside of farms grew by 300,000. The number is likely to be a big part of how the Federal Reserve decides on the next rate at its meeting later this month.
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