Investors continue to worry that stronger-than-expected economic data will lead authorities to keep interest rates higher for longer. Potentially, this will weigh on the economy next year, as the stock market inched mostly down on Wednesday.
The S&P 500 dropped 7.34 points to 3933.92, extending its losing streak to five days. The Nasdaq Composite focused on technology, lost 56.34 points to 10958.55. The DJIA climbed 1.58 points to 33597.92, barely changing from the previous day’s close.
The US economy has recovered faster than expected. Fears that the Federal Reserve will keep interest rates high to avoid inflation resurgence were fueled by Friday/Monday economic data. With recent inflation data indicating possible signs of cooling, investors had hoped that central banks would chill the pace of interest-rate hikes. Some investors believe the market has peaked following its recent rally based on expectations of slower rate increases.
The path for interest rates will become clearer next week with the the Fed meets and release of new inflation figures. Consumer strength is also a major focus of investors now as an indication of where the economy is headed. The Fed’s interest rate increases will have a long-term impact on the economy and the stock market.
Individual Stock Performance
After the firm improved its forecast and announced fiscal first-quarter sales up, Campbell Soup advanced $3.19, or 6%, to $56.18 in stock.
Carvana’s stock dropped $2.88 to $3.83, a 43% drop. According to the Wall Street Journal, the used-car dealer hired Moelis & Co. By tapping an investment bank that specializes in assisting firms in financial distress. They hope to gain access to financial help. The Wedbush Securities analysts cut the stock to “underperform,” claiming that the company’s risk of insolvency is rising.
State Street’s stock rose $6.09, or 8.2%, to $80.45 after the financial services firm announced a larger buyback program.
The pan-continental Stoxx Europe 600 fell 0.6%.
After China dropped several COVID-19 quarantine and testing standards, shares in Hong Kong and mainland China fell. Hang Seng in Hong Kong fell 3.2%, while the Shanghai Composite in China dropped 0.4%.
While reviving China’s economy may help reorder worldwide supply chains, pent-up demand caused by years of limits may contribute to inflationary risks.