|

S&P 500 ends lower as Fed rate hikes speculations rise after strong ISM data

  • S&P 500 closes down 0.70%, Nasdaq 100 drops over 1%, and Dow Jones Industrial Average falls 0.57%.
  • ISM Non-Manufacturing data for August fuels speculation of an additional rate hike by the Fed.
  • CME FedWatch Tool shows a 50% chance of a 25 bps rate hike by the Fed in November.

Wall Street finished Wednesday’s session with losses of between 0.57% and 0.70% after data put into the table additional rate hikes by the US Federal Reserve (Fed), as business activity accelerated in the services sector. Consequently, US Treasury bond yields rose, and the Greenback hit a 10-month high before finishing the session almost unchanged.

The S&P 500 ended the session with losses of 0.70%, while the heavy-tech Nasdaq 100 dropped more than 1%, and the Dow Jones Industrial Average slumped 0.57%.

Wall Street indices close in the red; Technology, Consumer Discretionary, and Health sectors lead the decline

Sector-wise, the biggest loser was Technology, followed by Consumer Discretionary and Health, each down by 1.37%, 0.97% and 0.61%. On the flip side, Utilities and Energ post modest gains of 0.20% and 0.14%.

The Institute for Supply Management (ISM) revealed that Non-Manufacturing activity improved in August, sparking speculations that an additional rate hike by the Fed is on the table. According to money market futures, there’s a 50% chance the US central could hike 25 bps at the November meeting, as shown by the CME FedWatch Tool.

In the meantime, the Federal Reserve released its Beige Book, which showed modest economic growth and inflation slowed in most parts of the country.

Boston Fed’s President Susan Collins said the US central bank needs to be patient when deciding the path of monetary policy while emphasizing the Fed’s commitment to bring inflation toward its 2% target.

WTI rose almost by 1% in the commodity space underpinned by Saudi Arabia and Russia’s 1.3 million barrel supply cut as traders eyed the release of US crude oil inventories.

S&P 500 Price Action – Daily Chart

S&P 500 Technical Levels

SP 500

Overview
Today last price4465.11
Today Daily Change-31.13
Today Daily Change %-0.69
Today daily open4496.24
 
Trends
Daily SMA204446.85
Daily SMA504476.4
Daily SMA1004346.05
Daily SMA2004169.42
 
Levels
Previous Daily High4512.81
Previous Daily Low4492.63
Previous Weekly High4538.24
Previous Weekly Low4406.07
Previous Monthly High4590.64
Previous Monthly Low4337.34
Daily Fibonacci 38.2%4500.34
Daily Fibonacci 61.8%4505.1
Daily Pivot Point S14488.31
Daily Pivot Point S24480.38
Daily Pivot Point S34468.13
Daily Pivot Point R14508.49
Daily Pivot Point R24520.74
Daily Pivot Point R34528.67

Author

Christian Borjon Valencia

Markets analyst, news editor, and trading instructor with over 14 years of experience across FX, commodities, US equity indices, and global macro markets.

More from Christian Borjon Valencia
Share:

Editor's Picks

EUR/USD challenges 1.1800, two-week lows

EUR/USD remains on the defensive, extending its leg lower to the vicinity of the 1.1800 region, or two-week lows, on Tuesday. The move lower comes as the US Dollar gathers further traction ahead of key US data releases, inclusing the FOMC Minutes, on Wednesday.

GBP/USD looks weaker near 1.3500

GBP/USD adds to Monday’s pessimism and puts the 1.3500 support to the test on Tuesday. Cable’s marked pullback comes in response to extra gains in the Greenback while disappointing UK jobs data also collaborate with the offered bias around the British Pound.

Gold loses further momentum, approaches $4,800

Gold recedes to fresh two-week troughs around the $4,800 region per troy ounce on Tuesday. The precious metal builds on Monday’s downtick following a marked rebound in the US Dollar and mixed US Treasury yields across the board.

Crypto Today: Bitcoin, Ethereum, XRP upside looks limited amid deteriorating retail demand

The cryptocurrency market extends weakness with major coins including Bitcoin (BTC), Ethereum (ETH) and Ripple (XRP) trading in sideways price action at the time of writing on Tuesday.

UK jobs market weakens, bolstering rate cut hopes

In the UK, the latest jobs report made for difficult reading. Nonetheless, this represents yet another reminder for the Bank of England that they need to act swiftly given the collapse in inflation expected over the coming months. 

Ripple slides to $1.45 as downside risks surge

Ripple edges lower at the time of writing on Tuesday, from the daily open of $1.48, as headwinds persist across the crypto market. A short-term support is emerging at $1.45, but a buildup of bearish positions could further weaken the derivatives market and prolong the correction.