Stocks closed broadly lower on Wall Street Tuesday, extending the market's recent string of losses, as traders ponder the Federal Reserve’s next moves in its campaign to cool stubbornly hot inflation. Roughly 80% of stocks in the S&P 500 fell, leaving the benchmark index down 57.58 points, or 1.4%, to 3,941.26 for its fourth straight drop. The Dow dropped 350.76 points, or 1%, to 33,596.34, while the tech-heavy Nasdaq lost 225.05 points, or 2%, to close at 11,014.89. Technology stocks, communication companies, and retailers had some of the biggest losses. Apple fell 2.5%, Disney slid 3.8% and AutoZone dropped 2.8%. The major indexes are on pace for a weekly loss after posting two straight weekly gains.
Several companies made big moves following financial updates and buyout announcements. Utility NRG Energy slumped 15.1% after announcing it is spending $2.8 billion in cash and assuming $2.4 billion in debt to buy Vivint Smart Home. Jewelry company Signet vaulted 20.2% after raising its profit and revenue forecasts for the year.The broader market's dip comes a day after stocks pulled back as stronger-than-expected readings on the economy raised worries that the Fed has a ways to go in getting inflation under control, the AP reports. The Fed is doing that by intentionally slowing the economy with higher interest rates.
"We’ve been in this period where investors have been anticipating now that the Fed will back off pretty soon, they’ll pause soon and probably even start cutting rates in the back half of 2023," says Bill Merz, head of capital market research at US Bank Wealth Management. "And then when we get the occasional robust jobs report and inflation report that makes it clear that inflation remains quite problematic and it’s not decelerating as quickly as anyone would like." The Fed is meeting next week and is expected to raise interest rates by a half-percentage point. It has raised its benchmark rate six times since March, driving it to a range of 3.75% to 4%, the highest in 15 years.
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